---
title: OTE (on-target earnings) — what it means and why it matters | Allocate AI
description: The total a sales role pays if you hit exactly 100% of quota: base salary plus the commission you would earn at target.
canonical: https://allocateai.io/glossary/ote
site: Allocate AI — https://allocateai.io
---

# OTE (on-target earnings)

The total a sales role pays if you hit exactly 100% of quota: base salary plus the commission you would earn at target.

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.

[Try the Sales Comp Calculator →](https://allocateai.io/calculators/sales-comp)

## Related terms

- [Commission](https://allocateai.io/glossary/commission) — Pay earned as a percentage of what you sell, so the amount changes with each deal and each month rather than arriving as a fixed salary.
- [Accelerator (commission)](https://allocateai.io/glossary/accelerator) — A higher commission rate that kicks in once you pass quota, so every dollar sold above target pays more than the dollars below it.
- [Draw (against commission)](https://allocateai.io/glossary/draw) — An advance on future commission paid to a salesperson, often during a ramp period, that is later deducted from commissions actually earned.
- [Base salary](https://allocateai.io/glossary/base-salary) — The fixed, guaranteed part of your pay, spread evenly across the year's paychecks before any bonus, commission, or stock is added.

**Plan in plain language.**

Allocate answers “can I afford this?” from your own numbers, writes the plan, and stages every change for your yes. It starts from an estimate before you link a bank.

[Get started](https://app.allocateai.io/signup)

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Allocate AI is a budgeting and financial-planning app: link your accounts, say what you want in plain words, and it writes the plan and stages every change for your approval. Read more at https://allocateai.io or see all pages in https://allocateai.io/llms.txt.