How sales commission works
Sales compensation is usually structured as a combination of base salary and variable commission tied to individual performance against a quota. The headline number most recruiters and hiring managers quote is OTE — on-target earnings — which equals your base salary plus the commission you would earn if you hit 100 percent of your quota exactly. It is important to remember that OTE is a target, not a guarantee. Your actual cash flow swings month to month depending on attainment, seasonality, and the specific mechanics of your plan.
The split between base and variable differs by role. A typical account executive (AE) might have a 50/50 pay mix, meaning half of OTE is base and half is commission at 100 percent attainment. A sales development representative (SDR) is often closer to 70/30, with more guaranteed base and less upside. Enterprise roles sometimes land at 60/40. Understanding your pay mix matters because it tells you how much of your income is predictable versus performance-driven. Use this calculator alongside our after-tax income calculator to see what your real take-home looks like after federal, state, and FICA withholding.
Understanding OTE and quota attainment
OTE is defined precisely as base salary plus variable commission at 100 percent quota attainment. Quota attainment is simply your actual sales divided by your assigned quota, expressed as a percentage. At 80 percent attainment, you earn less than your full OTE; at 120 percent, you earn more. The calculator lets you model monthly cash flow at any attainment level so you can see how your paycheck changes when you are below, at, or above target.
Because commissions are often paid quarterly or annually rather than monthly, your take-home can look lumpy even when attainment is steady. A single large commission check in one month may push you into a higher marginal tax bracket temporarily, which is why modeling the full 12-month cash flow — not just a flat annual average — gives you a more useful picture of your budget and monthly cash flow.
How accelerators work
Accelerators are commission plan mechanics that raise your payout rate on sales above quota to reward overperformance. The typical structure pays the base commission rate up to 100 percent of quota, then applies a multiplier — commonly 1.5x — to everything beyond that. Some plans add a second accelerator tier, for example 2x on sales above 150 percent of quota, which can dramatically increase earnings for top performers.
Here is a clear hypothetical example. Suppose your base salary is $100,000 and your pay mix is 50/50, so your variable target is also $100,000 at 100 percent quota. Your base commission rate is $1 of commission per $1 of quota attainment. With a 150 percent accelerator above 100 percent, 120 percent attainment pays the first $100,000 of quota at the base rate ($100,000 in commission) plus the extra $20,000 of sales at 1.5x ($30,000 in commission), for a total of $130,000 in variable pay instead of $120,000. That $10,000 difference is the accelerator working in your favor.
Draws, caps, and other plan mechanics
A draw is a guaranteed monthly advance against future commission. Recoverable draws carry forward: if you receive a $5,000 draw but only earn $3,000 in commission that month, the remaining $2,000 deficit is owed back against future commissions until it is paid off. Non-recoverable draws are absorbed by the company, making them more common during a new-hire ramp period. Caps limit total commission payout to a maximum percentage of base salary or a fixed dollar amount. Uncapped plans are generally preferred by high performers because they remove the ceiling on upside.
Frequently asked questions
What is OTE in sales?
OTE stands for on-target earnings. It is the sum of your base salary plus the commission you would earn at exactly 100 percent of quota attainment. OTE is a target, not a guarantee — your actual earnings depend on how much you sell relative to quota in each period.
How is sales commission calculated?
In its simplest form, commission equals a rate multiplied by sales, or attainment percentage multiplied by your target variable compensation. Most real plans add tiers or accelerators: a base rate up to 100 percent of quota, then a higher rate on over-attainment. The calculator above models base rate, accelerator multipliers, and caps so you can see total payout at any attainment level.
What is a commission accelerator?
A commission accelerator is a multiplier applied to sales above quota. Instead of earning the base rate on every dollar, you earn a higher rate — commonly 1.5x, sometimes 2x — on over-attainment. Accelerators reward reps who exceed quota and can significantly increase total earnings for top performers.
What is a draw against commission?
A draw is a guaranteed monthly advance paid against future commission earnings. With a recoverable draw, any shortfall carries forward and must be paid back out of future commissions. With a non-recoverable draw, the company absorbs the difference. Draws are common during onboarding or ramp periods when a rep is building pipeline and has not yet closed enough deals to cover a full paycheck from commission alone.
What is a typical base-to-commission split?
Pay mix varies by role and company. A 50/50 split is common for account executives, meaning half of OTE is base salary and half is commission at 100 percent quota. SDRs are often closer to 70/30, with more guaranteed base. Enterprise or strategic account roles may be 60/40 or even 70/30 in the other direction for highly tenured reps with large quotas.
What does quota attainment mean?
Quota attainment is the percentage of your sales quota you actually achieve in a given period. It is calculated as actual sales divided by assigned quota, multiplied by 100. Attainment drives your variable commission payout: below 100 percent you earn less than target variable, and above 100 percent you earn more, especially if your plan includes accelerators.
This calculator and its explanations are educational and give estimates only — not investment, tax or legal advice. Real returns, inflation and tax outcomes vary; talk to a qualified professional about your own situation.