Define: OTE

Business, Legal & Accounting Glossary

Definition: OTE



What is the dictionary definition of OTE?

Dictionary Definition


On target earnings.

OTE is the earnings that you will receive if you meet your targets.

Often companies will offer OTE (on-target earnings) if an employee has sales targets to meet.


Advertisement



Full Definition of OTE


OTE is on target or on track earnings.

This is a term that will often be found in an advertisement for a job, especially when the advertisement is recruiting salespeople.

Normally the pay structure will have two parts to it, a fixed part of the income and then a fixed sum or percentage of the commission, together these will be referred to as the package.

There will be a contract between the salesperson and the company that will clarify how much commission a person will make on sales, or if they will receive a fixed lump sum. Sometimes it will contain a combination of both, a fixed lump sum and a percentage of the commission on sales made.

These will be obtainable if the salesperson meets or exceeds their targets. All commission plans will be unique to the company that you are working for, however, often it is that the further an individual exceeds their targets the higher the commission that they receive.

Moreover, on-target earnings (OTE) can refer to the earnings managers or directors can achieve if they meet certain goals or hit specified targets in the correct time-frame.

OTE can also be used as a definition for annual goals and targets.

Benefits

OTE (on-target earnings) is used by employers to benefit their employees for their hard work. However, it should be noted that often OTE also has a positive impact on employee engagement and employee motivation. OTE is a great way to improve the productivity of your salespeople.

An Example Of OTE

If your salesperson has a salary of £30,000 a year and makes a commission of £15,000 in that year their OTE (on track earnings) could be expressed as £45,000 a year.


Advertisement



Examples of OTE in a sentence


The Role

Account Manager/Sales Executive

On Offer:

  • Competitive Salary of £25,000 – £28,000
  • OTE 1st Year approx. £42,7500 – £58,000 (Commission uncapped)
  • Progression opportunities available

Synonyms For OTE


on track earnings, OTE

OTE FAQ's


What Would Be Considered A Good OTE?
Generally, one fifth is considered to be good OTE and is what should be expected. This means that if a salesperson has an annual sales quota of £700,000 their on-target earnings should be around £140,000 a year. What is often considered to be the 'ideal' is between 6 and 8 times the sales quota. Please note, that these are only suggestions. The salary of your salespeople will change dependant on your industry, their skill set, how many steps there are in your sales process, how much revenue you get as well as many other factors.

Cite Term


To help you cite our definitions in your bibliography, here is the proper citation layout for the three major formatting styles, with all of the relevant information filled in.

Page URL
https://payrollheaven.com/define/ote/
Modern Language Association (MLA):
OTE. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. April 06, 2020 https://payrollheaven.com/define/ote/.
Chicago Manual of Style (CMS):
OTE. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. https://payrollheaven.com/define/ote/ (accessed: April 06, 2020).
American Psychological Association (APA):
OTE. PayrollHeaven.com. Retrieved April 06, 2020, from PayrollHeaven.com website: https://payrollheaven.com/define/ote/

Definition Sources


Definitions for OTE are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 2nd April, 2020