On-target earnings (OTE) is what a salesperson earns in a year at exactly 100% of quota. The OTE formula is base salary plus variable pay at target. A $110,000 base with $90,000 of target commission is a $200,000 OTE on a 55/45 pay mix. This calculator also splits an OTE by pay mix, shows pay at any attainment and checks quota against OTE.
Enter annual figures. Variable at target is the commission or bonus the plan pays at exactly 100% of quota. Quota is optional and adds the commission rate and the quota-to-OTE check.
Pay mix is written base over variable. Start from the OTE to split it, or start from a base salary to find the OTE it implies. The table compares common mixes on the same starting number.
The calculator sets the standard rate so the plan pays exactly OTE at 100% of quota, then applies a lower rate below the threshold and a multiplier above quota. Set the decelerator multiplier to 1 and the accelerator to 1 for a flat plan.
Get The Forecast Brief
You just worked out your on-target earnings and what the plan pays at your attainment. The Forecast Brief is a short email from Pete Furseth, ORM's COO, built on what ORM sees in its customers' forecasts.
OTE formulas, with Excel and Google Sheets versions
Every result above comes from one of these formulas. The examples use the calculator's default numbers, which are illustrative. The cell formulas work the same in Excel and Google Sheets.
| Measure | Formula | Excel or Sheets | Example (illustrative) |
|---|---|---|---|
| OTE | Base salary + variable pay at target | =B2+B3 | $110,000 + $90,000 = $200,000 |
| Pay mix | Base / OTE, then variable / OTE | =TEXT(B2/(B2+B3),"0%")&" / "&TEXT(B3/(B2+B3),"0%") | 55% / 45% |
| Base from OTE and mix | OTE x base share | =B4*B5 | $200,000 x 60% = $120,000 |
| Variable from OTE and mix | OTE x (1 - base share) | =B4*(1-B5) | $200,000 x 40% = $80,000 |
| OTE from base and mix | Base / base share | =B2/B5 | $140,000 / 70% = $200,000 |
| Monthly and quarterly OTE | OTE / 12 and OTE / 4 | =B4/12 and =B4/4 | $16,667 a month, $50,000 a quarter |
| Commission rate at target | Variable at target / quota | =B3/B6 | $90,000 / $900,000 = 10.0% |
| Quota-to-OTE ratio | Quota / OTE | =B6/B4 | $900,000 / $200,000 = 4.5x |
| Variable at attainment, flat plan | Variable at target x attainment | =B3*B7 | $100,000 x 120% = $120,000 |
| Variable with an accelerator only | Target variable up to quota, then multiplier x rate above it | =B3*MIN(B7,1)+B3*B11*MAX(B7-1,0) | $100,000 + $100,000 x 1.5 x 20% = $130,000 |
| Standard rate with a decelerator | Variable / (quota x (1 - threshold + multiplier x threshold)) | =B3/(B6*(1-B8+B9*B8)) | $100,000 / ($1,000,000 x 0.75) = 13.3% |
| Variable with both, and a cap | Rate x quota x (decelerated band + full band + accelerated band), capped | =MIN(B10*B6*(B9*MIN(B7,B8)+MAX(MIN(B7,1)-B8,0)+B11*MAX(B7-1,0)),B12*B3) | $140,000 at 120% (no cap) |
B2 is base salary, B3 variable pay at target, B4 OTE, B5 the base share of OTE as a percent, B6 annual quota and B7 attainment as a percent (120% for 120). B8 is the decelerator threshold as a percent, B9 the decelerator multiplier, B10 the standard rate from the row above, B11 the accelerator multiplier and B12 the cap as a multiple of target variable (2 for 200%). For an uncapped plan, drop the MIN and the cap. Format rates and mixes as percentages and pay as currency.
How to calculate OTE, step by step
- Start with the base salary. It is the part paid whatever happens. Use the annual figure before tax.
- Find the variable pay at target. This is what the plan pays at exactly 100% of quota: commission, plus any bonus tied to the same target. Leave out sign-on bonuses, equity and one-off contests.
- Add the two. Base plus variable at target is OTE. Divide base by OTE to get the pay mix.
- Divide variable by quota. That is the commission rate at target. A rate quoted without a quota tells you nothing about the pay.
- Divide quota by OTE. That is the quota-to-OTE ratio, the number a CFO checks first. At 5x, on-target pay costs 20 cents per booked dollar.
- Run the plan at realistic attainment. OTE assumes 100% of quota. Use the third tab at 75%, 100% and 150% to see what the accelerators, decelerators and any cap do to pay.
Pay mix: what 50/50, 60/40 and 70/30 mean in dollars
Pay mix is the split of OTE between base and variable, written base first. The more a role controls whether a deal closes, the more of its pay sits on the variable side. ORM's guide to pay mix covers how to choose one; the table shows what each common split does to a $200,000 OTE and a $1,000,000 quota, both illustrative.
| Pay mix | Base | Variable at target | Commission rate on $1M quota | Where it shows up |
|---|---|---|---|---|
| 50/50 | $100,000 | $100,000 | 10.0% | Full-cycle new business account executives |
| 53/47 | $106,000 | $94,000 | 9.4% | Median SaaS AE in Bridge Group's 2024 AE report ($190,000 median OTE, more than 170 B2B SaaS companies) |
| 60/40 | $120,000 | $80,000 | 8.0% | Enterprise AEs on long cycles, where a heavier base carries the rep between large deals |
| 68/32 | $136,000 | $64,000 | 6.4% | Median SDR in Bridge Group's 2025 SDR report ($80,000 OTE: $55,000 base, $25,000 variable, 351 B2B companies) |
| 70/30 | $140,000 | $60,000 | 6.0% | Roles that influence the deal but do not close it alone |
| 80/20 | $160,000 | $40,000 | 4.0% | Customer success and renewal roles |
The two Bridge Group rows are survey medians. The role notes on the other rows are common practice, not survey data; ORM's guide to OTE in sales explains why each role lands where it does. Read the table across one row and the point is plain: on the same OTE and quota, moving from 50/50 to 70/30 cuts the commission rate from 10% to 6%, and with it the swing in pay between a weak year and a strong one.
To work back from a base, divide by the base share. A $140,000 base on a 70/30 plan is a $200,000 OTE. The same base on a 50/50 plan would be a $280,000 OTE, which is why two offers with the same base can be very different jobs.
What the plan pays above and below quota
OTE is one point on a payout curve. The third tab draws the rest of it. Its default plan is illustrative: $100,000 base, $100,000 variable at target, a $1,000,000 quota, half rate on bookings up to 50% of quota, and 1.5x the rate above quota, uncapped.
One detail most calculators skip: a decelerator lowers pay on the first bookings, so the standard rate has to rise to keep OTE at 100% of quota. Without a decelerator this plan's rate is 10%. With half rate on the first $500,000 of bookings, the standard rate becomes $100,000 / $750,000 = 13.3%, the rate below the threshold 6.7% and the rate above quota 20%. If a plan adds a decelerator and leaves the rate at 10%, the rep at 100% of quota earns $75,000 of variable, and OTE has been cut without anyone saying so.
| Attainment | Bookings | Variable | Total pay | Share of OTE | Pay per booked dollar | Flat 10% plan, total pay |
|---|---|---|---|---|---|---|
| 25% | $250,000 | $16,667 | $116,667 | 58.3% | 46.7% | $125,000 |
| 50% | $500,000 | $33,333 | $133,333 | 66.7% | 26.7% | $150,000 |
| 75% | $750,000 | $66,667 | $166,667 | 83.3% | 22.2% | $175,000 |
| 100% | $1,000,000 | $100,000 | $200,000 | 100.0% | 20.0% | $200,000 |
| 120% | $1,200,000 | $140,000 | $240,000 | 120.0% | 20.0% | $220,000 |
| 150% | $1,500,000 | $200,000 | $300,000 | 150.0% | 20.0% | $250,000 |
| 200% | $2,000,000 | $300,000 | $400,000 | 200.0% | 20.0% | $300,000 |
Three things stand out. Below quota, the base makes every booked dollar expensive: at 25% attainment the company pays 46.7 cents per dollar booked. At and above quota, this plan holds pay at 20 cents per booked dollar, because a 1.5x accelerator on a 13.3% rate pays exactly the 20% that OTE costs at plan. And against a flat 10% plan, the decelerator and accelerator together pay $8,333 to $16,667 less in the weak years shown and $20,000 to $100,000 more in the strong ones. Moving pay from weak years to strong ones is the trade both bands exist to make. The commission accelerator and commission decelerator entries cover how to set each band.
A cap changes the top of the table. At a 200% cap on variable, this plan stops paying more once variable reaches $200,000, which happens at 150% attainment. ORM's OTE guide explains what reps do with deals once they hit a cap, and why that shows up as slipped close dates in next quarter's forecast.
Check the OTE against the quota
OTE on its own says nothing about whether it can be earned. Divide quota by OTE. In Bridge Group's 2026 AE report (158 B2B companies, published June 22, 2026), the median account executive had a $200,000 OTE and a $960,000 quota, a quota-to-OTE ratio of 4.6x, up from 4.2x in 2024. In 2024 the medians were a $190,000 OTE and an $800,000 quota (Bridge Group, 2024).
| Quota-to-OTE | On-target pay per booked dollar | How to read it |
|---|---|---|
| 3x | 33 cents | Expensive per dollar; common for SDRs and small-deal roles, where quota is not bookings |
| 4x | 25 cents | Low end of the usual AE range |
| 4.6x | 22 cents | Bridge Group median for AEs, 2026 |
| 5x | 20 cents | The common starting point for a full-cycle AE |
| 6x | 17 cents | High end; check that territory and pipeline can support it |
The same report found 48% of account executives reached annual quota in 2026, down from 51% in 2024. In its June 2026 summary, Bridge Group puts quota growth at about 2.4% a year against about 4.9% for OTE over the period it tracks. When fewer than half of reps hit quota, OTE describes a minority of the team. ORM's entry on a good OTE to quota ratio covers how the ratio moves by role and segment.
Monthly and quarterly OTE
Monthly OTE is annual OTE divided by 12, and quarterly OTE is annual OTE divided by 4. Both are gross figures at target. The base part arrives on every payroll. The variable part arrives when the plan pays it, often a month or a quarter after the deal closes, and only for what actually closed.
- On a $200,000 OTE at 55/45, the rep gets $9,167 a month of base for certain and $7,500 a month of variable on average at target.
- Quarter-heavy selling means uneven paychecks. Across ORM customers, the third month of a quarter is always the largest and the first month the smallest. A rep paid commission monthly sees most of the variable land once a quarter.
- New reps rarely earn OTE in year one. Pete Furseth, ORM's COO, sees it take a seller 15 to 18 months to confidently hit quota, depending on role and region. A draw or guaranteed variable during ramp is how plans bridge that gap; the commission calculator handles the payout on a single deal or period.
What Pete Furseth sees in comp plans
Pete builds capacity models and forecasts with B2B SaaS revenue teams. These points change how an OTE should be set and read.
- Plan for an attainment curve, not for 100%. "You want to determine what average attainment should be, maybe 75% to 80%, then know you will have a tail that is less and a tail that is more." Under the default plan in the third tab, a rep at 80% earns $173,333, about 87% of OTE. Budget for that, not for everyone at OTE.
- Add heads instead of raising the multiple. If the team cannot reach the goal at a healthy average, Pete's advice is to add sellers rather than give quotas that pull average attainment down to 50%. A quota-to-OTE ratio that creeps up every year is that mistake in slow motion.
- Use comp to steer, not to squeeze. "Where compensation becomes interesting is when the company wants to influence behavior. You might relieve quota or pay a multiple for selling a strategic product." That is a targeted change to one part of the plan, not a higher quota for everyone.
- Plan changes add noise in Q1. Across ORM's customer base, Q1 is often the slowest selling quarter, and sales kickoff, comp plan changes, territory adjustments and account reassignment all take selling time.
Common OTE mistakes
- Quoting OTE without a quota. A $200,000 OTE on a $700,000 quota and on a $1,400,000 quota are different jobs. Ask for both, and for the share of reps who hit quota last year.
- Adding a decelerator without raising the rate. As the table above shows, it quietly cuts OTE.
- Treating OTE as expected pay. With fewer than half of AEs at quota in Bridge Group's 2026 data, expected pay sits below OTE for most of a team.
- Comparing commission rates across companies. The rate falls out of OTE, pay mix and quota. Compare those three instead; ORM's average sales commission guide shows the math with dated sources.
- Mixing gross and net. OTE is before tax. Monthly OTE is gross pay at target, not take-home.
- Counting one-off pay as OTE. Sign-on bonuses, equity and contests belong in total compensation, not in OTE.
For role-level OTE ranges, see ORM's salary guides for the sales manager and the VP of Sales, each with dated sources.
ORM's take on OTE and the forecast
OTE, pay mix and the shape of the payout curve decide when reps want deals to close. Accelerators pull deals into the quarter, caps push them out, and both show up in the CRM as changed close dates. The most reliable slippage signal ORM tracks is a rep moving a close date, and a deal that slips from one quarter to the next is less likely to close at all.
ORM builds bookings and ARR forecasts from your own CRM history, with a low case, an on-target case and an upper bound, and models quota attainment by role and region. ORM targets 95% accuracy on the forecasts it builds. That is the input a comp plan needs: what each team is likely to attain, so the OTE and quota you set are ones people can earn.
Common questions
How do you calculate OTE?
Add the annual base salary to the variable pay the plan pays at exactly 100% of quota. A $110,000 base with $90,000 of target commission is a $200,000 OTE. If you know the OTE and the pay mix instead, multiply the OTE by the base share to get the base: $200,000 at 60/40 is a $120,000 base and $80,000 of variable at target.
What does a 70/30 OTE mean?
It means 70% of on-target earnings is base salary and 30% is variable pay earned by hitting quota. On a $200,000 OTE that is a $140,000 base and $60,000 of variable at target. Working back from a base, a $140,000 base at 70/30 gives a $200,000 OTE, because OTE equals base divided by the base share.
Does OTE include base salary?
OTE includes the base salary. It is base plus variable pay at target, so it is always higher than base for any role with a variable component. It usually leaves out benefits, equity and one-off bonuses such as a sign-on payment, so compare those separately when you weigh two offers with the same OTE.
How do you calculate monthly OTE?
Divide the annual OTE by 12. A $200,000 OTE is $16,667 a month at target, before tax. Only the base part arrives every month for certain. On a 55/45 mix that is $9,167 a month of base, and the other $7,500 a month depends on what closes and on when the plan pays commission, which is often monthly or quarterly in arrears.
What is the difference between OTE and expected earnings?
OTE is pay at exactly 100% of quota. Expected earnings is pay at the attainment a rep is likely to reach. Bridge Group found 48% of account executives hit quota in 2026, so most reps earn less than OTE. Run the attainment tab at 75% or 80% to see what a typical year pays under your plan.
What is a good OTE to quota ratio?
Most B2B SaaS plans set quota at four to six times OTE for a full-cycle account executive. Bridge Group reported a median quota-to-OTE ratio of 4.6x in 2026, up from 4.2x in 2024. At 5x, on-target pay is 20 cents per booked dollar. Lower multiples cost more per dollar; much higher ones are often unreachable.
Set quotas your team can actually hit
This tool shows what a plan pays. ORM forecasts the attainment behind it.
Schedule a Demo