“OTE: €120,000.”
Sounds great, right?
But before you get too excited, let’s break down what that number actually means.
What Does OTE Mean in Tech Sales?
OTE stands for On-Target Earnings. It’s the total amount of money you can earn if you hit 100 % of your sales quota. OTE typically includes:
- Base salary (guaranteed income)
- Variable compensation (bonus or commission, tied to quota attainment)
Example:
If your base salary is $60,000 and your OTE is $100,000, that means you could earn an additional $40,000 in commissions if you hit your targets.
Keyword: if.
OTE vs. Base Salary – What’s the Difference?
Your base salary is what you’re guaranteed, regardless of performance.
Your OTE assumes perfect quota attainment. But the reality? Most reps don’t consistently hit 100 %.
That’s why it’s critical to ask:
- How may reps in a team actually hit quota?
- Is this OTE realistic or inflated?
The OTE Trap: When 120k is not really 120k
In reality, many reps don’t hit 100 % – especially in year one.
Maybe you’re still learning the product. Maybe the territory isn’t great. Maybe the onboarding sucks.
Either way: hitting full OTE right out of the gate is rare.
And yet, many job seekers compare OTE numbers across companies like they’re fixed salaries. That’s dangerous.
Ramp Time: Your First Few Months Are Different
Here’s something no one tells you:
Even if your quota is €500,000/year, you’re not expected to close that in month one.
Most sales orgs have a “ramp period” – a few months of lowered expectations while you get up to speed.
That also means your earnings in year one will likely be far below the full OTE.
OTE Calculation Example
Let’s say a job posting says:
- Base: $70,000
- OTE: $140,000
This means you can earn $70,000 in commissions if you hit your quota.
If you only hit 80 % of your target, you’d earn around $126,000 total — base + 80 % of bonus.
OTE Isn’t Evil – But You Have to Ask These Questions
If you’re interviewing for a role with a high OTE, don’t be afraid to dig deeper:
- How realistic is hitting full OTE?
- What percentage of reps hit quota last year?
- Is OTE based on stretch goals or historical averages?
- What’s the ramp structure?
- How is commission calculated exactly?
A good hiring manager will respect these questions. A shady one won’t have answers.
FAQ: Common Questions About OTE
🎯 Is OTE guaranteed?
No. You’re only guaranteed your base salary. The rest depends on performance.
📈 Can I negotiate OTE?
Sometimes. But more often, it’s smarter to ask how realistic it is – or to push for a higher base.
🕐 How long until I earn full OTE?
Depends on ramp time. Usually, it takes 6–12 months to fully ramp – meaning you might only earn 60–80 % of OTE in year one.
Final Thoughts: Don’t Be Blinded by Big Numbers
OTE looks great on paper — but always dig deeper.
- Understand the base vs. variable split
- Ask about actual attainment rates
- Make sure it’s achievable, not aspirational
Knowing how OTE works puts you in a stronger negotiating position — and helps you avoid overpromises and underdeliveries.
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- Sales Quota – Explained Simply
- Quota Attainment
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