You’re looking at a job advert and the salary grabs your attention – From £27,500 to £50,000 per annum (OTE). It sounds strong, maybe even generous. But what does OTE mean?
Before you assume that the full amount will land in your bank account, it’s worth understanding what OTE actually represents. Many candidates see the combined total of both numbers and focus on that.
Later, they realise it depends on targets that weren’t as easy to hit as expected. That’s why understanding what OTE means early on can save you from any nasty financial surprises.
Key points: OTE meaning
- OTE stands for On-Target Earnings
- It includes base salary plus commission or performance pay
- You only receive full OTE if you meet agreed targets
- OTE is most common in sales and revenue-focused roles
- The larger OTE figure is potential income, not guaranteed pay
What does OTE mean in salary terms?
OTE stands for On-Target Earnings.
It describes the total amount you could earn over a year if you achieve your pre-agreed targets.
OTE will normally combine two parts. The first part is fixed: your base salary. The second part is variable: commission, bonuses or performance incentives.
Note: your base salary arrives regardless of results. It will remain as advertised in the job description. The commission portion of the OTE figure depends entirely on hitting agreed goals.
So when someone asks what does OTE mean in salary, the answer is simple. It’s your potential annual earnings if performance expectations are met.
An example of OTE salary
To better grasp what OTE means when it comes to a salary, we’ll look at an example.
Let’s say a company offers:
- £30,000 base salary
- £15,000 commission potential
- £45,000 OTE
If you hit 100% of your targets, you will receive the full £45,000. If you reach 80%, your commission usually reflects that percentage (so in this case, £12,000).
Some companies apply thresholds. That means you might need to reach a minimum performance level before earning commission at all. Others allow you to earn from the first sale.
The structure varies. The principle stays the same. It’s definitely worth clarifying the particular structure associated with your role ahead of time. Indeed, it should be among the questions to ask at an interview.
Why OTE is used so often in sales
You’ll see OTE most frequently in sales roles because performance is measurable.
Revenue generated, deals closed, contracts secured – these can all be tracked. Linking pay to those outcomes creates a direct relationship between performance and reward.
For confident, competitive professionals, this can be appealing.
High performers sometimes exceed their stated OTE, particularly in uncapped commission structures.
But not all environments are equal. Targets may be influenced by market demand, lead quality, pricing, competition or territory allocation.
That’s why what does OTE mean in sales isn’t just about the headline number. It’s about how realistic the targets are.
Is OTE guaranteed?
Put simply, no.
Only the base salary is guaranteed.
Commission depends on results. If you fall short of target, your total earnings fall too.
In some roles, commission is capped. That means even if you exceed your target, your earnings cannot rise above a certain level. In others, commission is uncapped, meaning there is technically no ceiling.
Before accepting any offer built around OTE, clarify this point. It makes a significant difference.
How to think about OTE financially
When planning your finances, focus on your base salary.
That is the amount you can rely on. OTE should be viewed as earning potential rather than certainty.
This is particularly important during your first few months in a new role. Building pipeline, developing relationships and understanding products takes time. It’s common for new starters to earn less than full OTE early on.
Treating commission as additional income rather than guaranteed pay reduces pressure.
What to ask before accepting an OTE role
A strong job offer should stand up to straightforward questions.
- How many employees achieved full OTE last year? If very few did, targets may be unrealistic.
- Is commission paid monthly or quarterly? Payment frequency affects cash flow – which may impact you more or less, depending on your personal circumstances.
- Is there a ramp-up period for new starters? Some employers adjust targets in the first few months of a new role.
- Are targets individual or team-based? Shared targets introduce variables outside your control, which may or may not limit the likelihood of maximising OTE.
Clear answers indicate transparency. Vague responses should prompt caution.
OTE meaning in jobs outside sales
While sales roles dominate OTE discussions, the structure appears in other industries too.
Recruitment consultants, estate agents, business development managers and some financial advisers often work under OTE-based pay models.
In each case, the idea remains consistent: a fixed base plus variable earnings equals potential total income.
The balance between those elements determines whether the role feels stable or high-risk.
OTE vs basic salary: The key difference
Basic salary is guaranteed.
OTE is conditional.
That distinction matters when evaluating offers. A role advertised at £50,000 OTE might only include a £28,000 base salary. The rest depends on performance.
Always separate the guaranteed portion from the variable portion in your mind.
FAQs: OTE salary meaning
What does OTE mean in terms of salary?
OTE stands for On-Target Earnings. It represents the total annual income you could earn if you meet your agreed performance targets.
What is OTE salary?
OTE salary combines your fixed base salary with commission or bonuses linked to performance.
What does OTE mean in sales?
In sales roles, OTE reflects the total income earned when you hit your sales quota or revenue target.
Is OTE guaranteed?
No. Only the base salary is guaranteed. Commission depends on performance.
Can you earn more than OTE?
If commission is uncapped, it may be possible to earn more than the advertised OTE.
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Final thoughts: What does OTE mean in salary?
OTE-based roles can offer strong earning potential. For driven professionals who enjoy working towards measurable targets, they can be rewarding.
But understanding OTE meaning before signing a contract is essential. The large figure in the advert reflects potential. The structure behind it determines reality.
If you’re applying for commission-based roles, make sure your CV clearly shows measurable results. Employers offering OTE want evidence that you can hit targets. When applying for the most competitive roles, bespoke career coaching will better your chances of success.
There’s plenty more career-focused advice throughout our blog. For example:
- How To Tell If An Interview Went Well: Good and Bad Signs
- How To Write A Supporting Statement For A Job Application With Template
- Being Self-Employed But Working For An Employer: Explained
- How To Tailor A CV To The Job Description
- Tell Me How You Handled A Difficult Situation Example Answers For Interviews
- Sick Days At Work: The Rules Around Sick Days In The UK
- Unpaid Leave In The UK
- CV Lies: Is It Illegal To Lie On Your CV?
If you need support presenting your achievements effectively, PurpleCV can help you showcase your experience with clarity and confidence. Contact us today to launch your career journey.
