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OTE meaning in wages
OTE stands for On-Target Earnings. It refers to the total expected pay you could earn in a role if you meet all performance goals. This is most common in sales and retail jobs but can apply to any role with commission or bonus-based pay.
What does an OTE salary include?
An OTE salary combines guaranteed pay with performance-based incentives, giving a full picture of your potential earnings.
It typically includes:
- Base salary – Your fixed, regular pay (e.g. monthly or annual salary), paid regardless of performance
- Commission – Extra pay based on sales or performance achievements
- Bonuses – Rewards tied to hitting team, company, or personal targets
- Additional incentives – Such as referral bonuses, profit sharing, or milestone rewards
OTE salary example
Let’s say a job advert lists an OTE of £50,000:
- Base salary: £30,000 (guaranteed)
- Performance-related pay: £20,000 (earned only if you meet targets)
If you hit all your goals, your total earnings would be £50,000. Exceed your targets, and you could earn even more. Fall short, and you might take home just the base salary.
What does OTE mean in job adverts?
An advert might say:
“Real Estate Agent – £57,000 OTE”
This doesn’t mean you’ll automatically earn £57,000. It means you’ll have the chance to reach that figure if you hit your targets. You may start with a lower base salary (e.g. £27,000) and earn the rest through commission or bonuses.
OTE pay explained (in-depth)
A real estate agent’s role advertises an annual salary of £57,000 OTE. The base salary is £27,000 per year. Agents earn a 2% commission on every property sale. The average monthly sales target is £125,000 in property value.
If an agent meets their sales target, their monthly commission would be £2,500 (2% of £125,000). Over the course of 12 months, this equates to £30,000 in commission. Adding the base salary of £27,000 plus the potential £30,000 commission results in an annual OTE of £57,000.
If the sales targets are not fully met, the total earnings will be lower, but the base salary of £27,000 remains guaranteed.
Things to look out for:
- “Up to” OTE – Suggests the maximum possible earnings, not guaranteed
- “Uncapped” commission – Means you can exceed the stated OTE if you perform above expectations
- “Realistic OTE” – Implies that the target earnings are achievable, not inflated
Always ask during the interview how realistic the OTE salary is, how it’s calculated, and how often employees actually hit it. If you’ve seen a job ad listing OTE but aren’t sure how to tailor your CV, try one of our customisable CV templates to guide your formatting and phrasing.
Which jobs typically use OTE salaries?
Jobs that utilise OTE (On-Target Earnings) are typically in sales-driven or target-based roles, where performance bonuses or commissions are a significant component of compensation. If you’re applying for one, check out our CV examples to help you tailor your application.
Here are common job titles that often advertise salaries with OTE:
Sales & Business Development
- Sales Executive
- Business Development Executive / Manager
- Account Executive
- Territory Sales Manager
- Field Sales Representative
- Inside Sales Representative
- Solutions Consultant
Recruitment & Staffing
- Recruitment Consultant
- Talent Acquisition Specialist (especially in agency roles)
- Headhunter
Call Centre & Telesales
- Telesales Agent
- Call Centre Sales Agent
- Outbound Sales Representative
Property & Real Estate
- Real Estate Agent
- Lettings Negotiator
- Property Sales Consultant
Finance & Insurance
- Financial Sales Advisor
- Mortgage Broker
- Insurance Sales Agent
Pros and cons of an OTE salary
Understanding the benefits and drawbacks of an OTE salary can help you decide if this pay structure suits your goals and working style.
Pros of an OTE salary
Unlimited earning potential
If you’re a high performer, you can earn far more than a fixed salary.
Motivation to achieve targets
Clear goals tied to pay can help you stay focused and productive.
Reward for hard work
Your earnings reflect your performance, not just your time.
Career progression opportunities
Success in target-based roles often leads to faster promotions and better offers.
Cons of an OTE salary
Unpredictable income
If targets are difficult or inconsistent, your monthly pay may vary.
High-pressure environment
The pressure to meet sales goals can lead to stress or burnout.
Unrealistic targets
Some companies inflate OTE figures that are rarely achieved.
Variable commission structures
Bonus rules can change or be unclear, especially in startups or small companies.
Base salary may be low
You might rely heavily on bonuses to reach your desired income.
Is an OTE salary right for you?
Whether an OTE salary is a good fit depends on your personality, career goals, and risk tolerance.
If you’re highly motivated by targets and enjoy chasing goals, an OTE structure can be a good opportunity to boost your earnings. This setup often works well for competitive individuals who thrive in performance-based roles and are comfortable with some unpredictability.
On the other hand, if you prefer financial stability and peace of mind knowing exactly what your paycheck will be each month, an OTE role might not suit you. For some, the pressure to perform can outweigh the potential financial benefits, making a traditional fixed salary the more attractive option.
Ask yourself:
- Do I feel energised by goals and targets?
- Am I comfortable with variable income?
- Do I have the confidence to meet or exceed expectations regularly?
Your answers will help guide whether OTE compensation aligns with your ideal work style and lifestyle. If you’re set on applying to a commission-based job, see our sales CV guide for tips on how to frame your earnings and targets.
OTE salary questions to ask in an interview
Here are a few key questions to ask:
1. How is the OTE salary structured?
Ask for a breakdown of the base salary versus commission or bonus. This gives you a clearer picture of how much of your income is fixed and how much is performance-based.
2. Are the targets realistic and achievable?
Request examples of how many team members typically reach their OTE. If only a small percentage hits their targets, it may not be a dependable income.
3. How are performance targets set?
Clarify whether targets are fixed, tiered, or subject to change. Also, ask how often they’re reviewed and whether they’re based on individual, team, or company performance.
4. Is the OTE capped or uncapped?
Some roles have a maximum commission limit (capped), while others allow you to earn beyond your OTE (uncapped). This affects your overall earning potential.
5. How frequently is commission or bonus paid?
Find out whether performance earnings are paid monthly, quarterly, or annually. Delayed payments might impact your budgeting and cash flow.
6. What happens if I don’t meet my targets?
It’s important to understand if underperformance affects your base pay, job security, or future opportunities within the company.
Key takeaways: What does OTE mean in salary?
- OTE (On-Target Earnings) refers to your base salary plus expected bonus or commission if you meet all performance targets.
- It’s not guaranteed income — only the base salary is fixed. The bonus or commission depends entirely on your performance.
- In some roles, especially sales and recruitment, the base salary may be low, with OTE used to make the total package more appealing.
- OTE structures can offer higher earning potential, but also come with uncertainty and pressure to hit targets.
- This pay model suits highly motivated individuals who thrive under goals and variability. If you prefer stable, predictable pay, a traditional salary structure might be better.
- If you’re aiming for a target-driven role, your CV needs to reflect that. Use our CV builder to highlight relevant skills like goal orientation, resilience, and negotiation.
FAQs: On target earnings explained.
What does OTE compensation mean?
OTE stands for On-Target Earnings, the total expected salary including your base pay and bonuses if all performance targets are met.
Is OTE a guaranteed salary?
No. Only the base salary is guaranteed. The bonus portion is dependent on hitting your targets.
Who typically gets paid an OTE salary?
Mostly salespeople, account managers, and other target-driven roles across tech, recruitment, finance, and real estate.
Can you earn more than with OTE compared to a standard salary?
Yes and no. It depends on whether you can consistently meet or exceed your targets. If you fall short, your earnings may be limited to the base salary, which is often lower than a traditional fixed salary.
How do I know if the OTE is realistic?
Ask about average earnings, how many employees actually hit their targets, and how those targets are set. You can also look up company salary information and read reviews from current or former employees on sites like Glassdoor or Indeed to get a better sense of whether the OTE is regularly achieved.
Andrew Smith
Senior Content Writer
Meet Andrew Smith – an accomplished English copywriter with a strong background in SEO optimisation. Passionate about producing engaging content, Andrew has written across various fields, including health and fitness, security, travel, and tourism.
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