The Difference Between Base Salary And OTE: What They Mean And How To Use Them

Updated: December 20, 2021

A base salary is a fixed amount that an employee will receive before any bonuses or commission. On the other hand, OTE stands for “on target earnings” and is usually calculated based on commissions and bonuses.


Base salary is more conservative than OTE since it represents what an employee would earn if they don't reach goals. It gives the employer more control over how much they want to spend on their employees. Base salary also has less variability with fluctuations in commission payouts, which are based on performance.



OTE offers many benefits to both employers and employees alike. Employees are incentivized to work harder because it provides extra incentive for good performance. Employers are able to use OTE as a way of paying employees for increased performance.


What is a Base Salary?


A base salary is a fixed amount that an employee will receive before any bonuses or commission. Base salaries are guaranteed by an employer to the employee, which means they are fixed.


On the other hand, OTE stands for “on target earnings” and is usually calculated based on commissions and bonuses. OTE is calculated based on performance. Employees are paid on commission instead of a fixed base salary.


What does OTE stand for?


OTE, which stands for “on target earnings,” is calculated based on commissions and bonuses. This is more variable than base salary because it depends on the performance of the employee.


Employers are able to use OTE as a way of paying employees for increased performance. If they do well, they will receive more earnings. This is an incentive that encourages employees to perform better.


OTE also offers many benefits to both employers and employees alike. Employees are incentivized to work harder because it provides extra incentive for good performance. Employers are able to use OTE as a way of paying employees for increased performance.


OTE can be beneficial for both employers and employees if it is used correctly.


Benefits of Base Salary


Base salary is a fixed amount that an employee will receive before any bonuses or commission. It's more conservative than OTE since it represents what an employee would earn if they don't reach goals. A base salary gives the employer more control over how much they want to spend on their employees.


OTE offers many benefits to both employers and employees alike. Employees are incentivized to work harder because it provides extra incentive for good performance. Employers are able to use OTE as a way of paying employees for increased performance.


Benefits of OTE


One major benefit of OTE is that it incentivizes employees to work harder. An important part of a company is the team, and a more incentivized team will be a more productive team.


OTE also provides more flexibility for employers to pay employees. A base salary will have a fixed amount that the employee will receive before any bonuses or commission. OTEs are calculated based on commissions and bonuses, which means that employers have the ability to adjust the amount an employee earns based on their performance.


Employees may also feel more satisfied with OTE bonuses because they are more specific to their individual performance. With a base salary, employees may feel less rewarded for a job well done because there is no extra incentive for good performance.


Conclusion


OTE is a better option for employees because it's based on performance and not a fixed amount.


Base salary is more conservative than OTE since it represents what an employee would earn if they don't reach goals. It gives the employer more control over how much they want to spend on their employees. Base salary also has less variability with fluctuations in commission payouts, which are based on performance.


OTE offers many benefits to both employers and employees alike. Employees are incentivized to work harder because it provides extra incentive for good performance. Employers are able to use OTE as a way of paying employees for increased performance.


OTE is a better option for employees because it's based on performance and not a fixed amount. If employees reach their goals, they can make significantly more than their base salary. This encourages employees to work harder since they are rewarded for the work they do. Employers also benefit from this type of arrangement because they can use it as a way of paying employees for increased performance.


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