OTE (on-target earnings)

How OTE actually works

OTE is a package description, not a promise. A $120k OTE role split 70/30 pays an $84k base with $36k available at full target achievement; the split matters more than the headline, because it sets how much of the income is guaranteed. Anyone weighing an OTE offer should ask three things: the split, what percentage of the team actually hits target, and whether earnings are capped above it.

The trap in the acronym (Australia)

In Australian payroll, OTE also means something entirely different: ordinary time earnings, the ATO-defined base on which the superannuation guarantee is calculated. The two collide in practice, because commissions and performance bonuses count toward the super base, meaning super is payable on the variable component too. (Since the July 2026 payday super rules, that base is formally called qualifying earnings: ordinary time earnings plus salary-sacrificed super, with all commissions included.) A sales offer that quietly calculates super on base only is understating the package and the employer's cost at the same time.

Writing OTE offers that hold up

State the base, the variable at target, the split and any cap in the offer, not just the blended number. Publish the quota assumptions the OTE rests on, because "realistic OTE" recruitment claims that the actual attainment data contradicts are exactly the kind of representation that sours a hire in the first quarter and surfaces in reviews later.