OTE Explained: What On-Target Earnings Mean and What to Watch For

According to the hyrise SaaS Compensation Benchmark 2026 — built on 1,042 signed offers at 218 German tech companies — the average quota attainment rate for sales reps in Germany runs at 70–85%. That means most reps earn less than their nominal OTE.

OTE appears in almost every sales job posting — but what it actually means is less obvious. Especially this question: what do you really earn at 80% attainment versus 100%?

Short answer

OTE (On-Target Earnings) = base salary + variable component at 100% quota attainment.

At 80% attainment, you do not earn 80% of OTE. You earn your base plus 80% of your variable component. The difference can be several thousand euros per year.

The formula:

Actual annual earnings = base salary + (variable × attainment rate)

OTE broken down: the formula in practice

Take a concrete example: OTE €80,000, base €56,000 (70%), variable €24,000 (30%).

Attainment	Base	Variable (proportional)	Actual annual earnings
50%	€56,000	€12,000	€68,000
80%	€56,000	€19,200	€75,200
100%	€56,000	€24,000	€80,000
120%	€56,000	€28,800	€84,800

Without accelerators (more on those below), the relationship is linear. Every percentage point below 100% costs you 1% × variable. On €24,000 variable, that's €240 per percentage point of underperformance.

What the OTE and base split actually signals

The ratio of base to variable varies significantly by role:

Role	Typical base share	Typical variable share
SDR	70–80%	20–30%
Account Executive (mid-market)	60–70%	30–40%
Account Executive (enterprise)	50–55%	45–50%
Sales Manager (first-line)	60–65%	35–40%
VP of Sales	50–60%	40–50%

A high OTE with a high variable share is only attractive if the quota is realistic. A lower OTE with low variable gives you more predictability.

Accelerators: what happens above 100%

Accelerators are elevated commission rates that activate once you exceed 100% quota. They define the upside of an offer.

Without an accelerator: you earn at the same rate above 100% as below it. Every additional deal has the same commission.

With an accelerator (example: 1.5× above 100%): on quota overattainment you earn 150% of your base commission rate. At 120% attainment, the difference compounds meaningfully.

Concrete example: €24,000 variable, base commission rate 10%, quota €240,000 ARR.

Without accelerator at 120% attainment (€288,000 ARR closed): €24,000 × 1.2 = €28,800.

With 1.5× accelerator above 100%: First €240,000 (100%): €24,000. Next €48,000 (overattainment): €48,000 × 15% = €7,200. Total: €31,200 — €2,400 more than without accelerator.

Top performers at companies with good accelerator structures can reach 130–150% of nominal OTE this way.

Red flags in OTE structures

Not every OTE is equal. These structures are warning signs.

Quota above 7× OTE is historically almost impossible to hit in most markets. If the quota is €700,000 ARR against €100,000 OTE, check carefully what the team's actual attainment rate has been.

No accelerators means no upside. You earn the same rate above 100% as below it. This caps earning potential significantly and says something about the company's compensation philosophy.

Cliff structures below 50%: at some companies, below a certain attainment threshold (50% or 60%) you earn zero variable. That increases your downside risk sharply.

Payout on collection basis means: you receive commission only when the customer pays — not when you close. That shifts payment risk onto you.

Quota changes without consent mid-quarter: it happens, and it's a sign of poor compensation governance.

OTE versus total compensation

OTE is not the same as total compensation. Other components:

Equity: at startups and scale-ups, often significant. Options or RSUs have real value but are illiquid. Include them in the full picture, but don't bet on them alone.

Sign-on bonus: one-time, not recurring. Useful as compensation for forfeited bonus at your previous employer, but not a substitute for a lower annual OTE.

Benefits: health insurance contribution, equipment, mobility budget, learning budget. Depending on company, €2,000–6,000 annual value.

Ramp guarantees: many companies pay a guaranteed minimum during the first 3–6 months to buffer the ramp period. Ask about it.

How to compare two offers with different OTE correctly

Step one: calculate the realistic annual earnings, not the nominal OTE. Ask for the team's historical attainment rate. If 60% of reps hit 80% attainment, model at 80%, not 100%.

Step two: compare the base component. Higher base means more predictability, less upside. Higher variable means more upside, more risk.

Step three: check the quota structure. 5× OTE is fair. 8× OTE is almost never achievable regardless of nominal OTE.

Step four: look at accelerators. A lower OTE with a 2× accelerator can be more attractive at good performance than a higher OTE without one.

Step five: factor in equity, benefits, and ramp guarantees to get the full picture.

What to do next

If you're reviewing a specific offer or comparing multiple:

1. Calculate your realistic annual earnings using the team's actual attainment average.
2. Ask about quota structure, accelerators, and payout basis — before you sign.
3. Compare the full package against the hyrise salary checker or the 2026 SaaS Compensation Benchmark.

A higher OTE on paper isn't always the better offer. Understanding that puts you in a stronger negotiating position.