OTE stands for On-Target Earnings or On-Track Earnings, which is a type of salary structure that combines base salary and commission earned by an employee when they meet their sales quota. It is the maximum annual salary that an employee can earn when sales and commission are part of their compensation. The OTE salary can be capped or uncapped, depending on the organization and employer. The OTE number is usually given in an annual figure and is calculated by adding the base salary of the position to the annual commission earned. The equation for OTE is: Annual base salary + annual commission earned at 100% of quota = On-Target Earnings (OTE) . The OTE model is a popular compensation model that companies use to pay and motivate salespeople. It is a useful way to get different departments in an organization aligned around revenue and expenses.