On-target earnings is the headline number for a sales job. It adds your base salary to the commission you would earn by hitting quota exactly. An offer described as $160,000 OTE with a 50/50 split means an $80,000 base and $80,000 of commission at 100% of quota.
The number is useful for comparing offers, but it is a forecast, not a promise. Actual earnings depend on how realistic the quota is, how much of the team hits it, how territories are assigned, and how the plan handles overperformance and underperformance. Two $160,000 OTE roles can pay very differently if one team averages 110% of quota and the other averages 70%.
Questions worth asking before accepting: What percentage of reps hit quota last year? How is quota set and how often does it change? Is there a ramp period with guaranteed commission while you build pipeline? Are there accelerators above quota and decelerators below it? Is there a draw, and is it recoverable?
The common mistake is budgeting as if OTE were salary. Monthly bills should fit inside the base, with commission funding goals, savings, and flexible spending. A second mistake is ignoring the split: a $160,000 OTE with a $60,000 base is a riskier job than the same OTE with a $100,000 base.