What is OTE Salary?

OTE stands for On-Target Earnings, a term commonly used in sales, recruitment, and other commission-based roles. It represents the total compensation you could earn if you meet all performance targets, typically combining a base salary with an expected bonus or commission. Unlike a fixed annual salary, OTE is not guaranteed — your actual pay may be higher or lower depending on your results.

Understanding OTE is crucial when comparing job offers, especially if you are used to hourly wages or a standard salaried position. This article explains how OTE works, how it relates to UK wage benchmarks, and how to convert it to an hourly rate.

How OTE Differs from Base Salary

Your base salary is the fixed amount you receive each month, regardless of performance. OTE adds an estimate of variable pay. For example, a job might advertise "£30,000 base + £20,000 OTE" meaning total potential of £50,000. However, if you miss targets, you may only earn the base. Always ask recruiters for the realistic average earnings and the proportion of employees who hit OTE.

UK Wage Benchmarks for Context

To assess whether an OTE offer is competitive, compare it with official UK earnings data. The Office for National Statistics (ONS) Annual Survey of Hours and Earnings (ASHE) for April 2025 shows:

• Median full-time weekly earnings: £766.60
• Median full-time annual earnings: £39,039
• Median full-time hourly earnings (excluding overtime): £19.67

These figures are for all full-time employees, not just commission-based roles. If your OTE is significantly above £39,039, you are looking at an above-average package — but check the base salary component.

For lower-paid roles, the National Living Wage (for employees aged 21 and over) was £12.21 per hour in April 2025. The government has announced a rise to £12.71 per hour for 2026/27. At 37.5 hours per week, that equates to roughly £24,785 per year. Any OTE below this level would be below the legal minimum for eligible workers.

Converting OTE to an Hourly Rate

If you are used to thinking in hourly wages, you can convert an OTE salary to an approximate hourly rate using the formula:

Annual OTE ÷ 52 weeks ÷ contracted weekly hours

Most full-time roles assume 37.5 or 40 hours per week. For example:

• OTE £40,000 ÷ 52 ÷ 37.5 = £20.51 per hour
• OTE £50,000 ÷ 52 ÷ 37.5 = £25.64 per hour

Remember: this is the hourly equivalent of your target earnings. Your base salary hourly rate will be lower. For instance, if the base is £30,000 and OTE is £50,000, the base hourly rate is about £15.38 (at 37.5 hours), while the OTE hourly rate is £25.64.

Regional and Seniority Differences

Pay varies significantly by region and seniority. ONS data shows that London and the South East have higher median earnings, partly due to London weighting. Many employers add a London allowance or higher cost area supplement (HCAS). For example, NHS pay scales for 2026/27 include HCAS of 20% of basic salary (inner London), 15% (outer), and 5% (fringe).

Seniority also matters. In sales, junior roles might have OTE of £25,000–£35,000, while senior account managers or directors can see OTE of £60,000–£100,000+. Always compare roles at similar levels and in similar regions.

Using Our Tools

To quickly see how an OTE or hourly rate translates to annual salary, try our Hourly to Salary calculator. For more UK pay data, visit our salary data page, which includes median earnings by occupation and region.

Caveats and Considerations

• OTE is an estimate; actual earnings depend on performance, market conditions, and company policy.
• Hourly-to-salary conversions assume a steady 37.5-hour week and 52 weeks, ignoring unpaid overtime, bonuses, or salary sacrifice.
• Always check your contract for overtime rules, holiday pay, and any London weighting.
• The figures in this article are based on official sources (ONS ASHE, GOV.UK, NHS Employers) and the on-site reference database for 2026/27.

Summary

"What is OTE salary?" It is a target compensation figure that includes base pay plus expected variable earnings. When evaluating an OTE offer, compare the base salary to UK benchmarks like the National Living Wage and median earnings, and convert the OTE to an hourly rate using the formula above. Remember that OTE is not guaranteed — focus on the base and realistic potential.

For more articles on UK pay, see our salary articles and topics pages.