What Does OTE Mean in Relation to Salary?

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Frequently seen in job advertisements for sales and retail jobs, OTE means “on-target earnings” and refers to the amount of commission available if an associate meets all of their sales targets. While OTEs are a potential part of one’s total compensation, they are not always an accurate representation of one’s true salary. Ultimately, when considering a job, one should pay more attention to the base salary as opposed to the OTE, as it can be difficult to meet the required sales goals necessary to earn the full amount listed.

During an interview, one should always ask what the sales targets are and decide if they are achievable given one’s sales abilities. Sales targets vary from company to company, so one company’s sales targets may be easier than another’s to reach.

An OTE can be a fixed lump payment, a specific commission percentage or some combination of the two. It is easy to get lured in to a position by the promise of a high OTE, despite the base salary being the only figure one can truly be guaranteed of earning. When considering a position, it is best to focus on guaranteed earnings.

OTE is also used for executive pay dependent on achieving various goals that may or may not be sales related. Additionally, when considering OTE, one must think about whether one must chase new clients or if new business from current clients also counts toward meeting one’s sales targets.