OTE (on-target earnings)

The base salary is guaranteed; the variable part depends on results. A rep with a $160,000 OTE on a 50/50 split earns $80,000 base and $80,000 commission at exactly 100% of quota. Below quota they earn less. Above it, uncapped plans and accelerators (higher commission rates past 100%) can take earnings above OTE.

The split depends on how much the rep controls the outcome. Roles that close revenue, such as account executives, usually carry a larger variable share than SDRs or customer success managers, whose results depend more on other people. SDR variable pay is often tied to meetings held or opportunities created rather than closed revenue.

Example: an SDR offer lists $90,000 OTE with a 70/30 split, so $63,000 base and $27,000 variable. The variable pays $450 per qualified meeting held, so the SDR needs 60 qualified meetings a year, or 5 a month, to reach OTE.

For a sales leader, OTE is a budget line. A rep's full cost is OTE plus payroll taxes, benefits and tools, and the revenue or pipeline the rep produces has to cover it. Outbound teams compare that cost with the meetings each SDR books per month to decide whether to hire, automate or outsource prospecting.