Sales Commission & Quota Attainment Calculator

What is OTE and how is it different from base salary?

OTE stands for On-Target Earnings — it's the total cash compensation a rep is expected to earn if they hit exactly 100% of their quota. OTE = base salary + on-target variable (OTV).

The key distinction is that only the base salary is guaranteed. The variable component (OTV) is contingent on performance. A rep with a $120,000 OTE might have a $72,000 base and $48,000 OTV. They will receive $72,000 regardless of quota attainment; the remaining $48,000 has to be earned through revenue.

OTE is a planning figure, not a promise. It represents what the company expects a fully ramped, average-performing rep to take home in a normal year. In practice, some reps land below OTE and others exceed it significantly through accelerators. When evaluating a sales job offer, the more useful question is: what percentage of the team typically hits 100% of quota? A company where 80% of reps hit plan has a more reliable OTE than one where 30% do.

What is the difference between a flat commission rate and a tiered structure?

A flat commission applies a single rate to all revenue regardless of how much is booked — 8% on every dollar, from the first to the last. Simple, transparent, and easy to model.

A tiered commission applies different rates depending on how much total revenue has been booked, usually measured as a percentage of quota. The two main implementations:

Marginal (bracket-style): Each rate applies only to revenue within that band — similar to how income tax brackets work. The first $300k of a $600k quota might earn 6%, the next $300k earns 8%, and revenue above quota earns 12%. The rate for each additional dollar depends on which band it falls in.

Whole-stack: Once a rep crosses a tier threshold, the new rate applies to all their revenue — not just the marginal portion. If the 75% threshold unlocks an 8% rate, every dollar booked (including the first) is retroactively paid at 8%. This creates sharp incentives to cross tier boundaries, but also means there are significant "cliffs" — a single deal can trigger a large retroactive commission jump.

This calculator uses the whole-stack model because it's more common in enterprise B2B sales, and because it has a clean mathematical property: at exactly 100% quota, commission equals OTV if the Tier 3 rate is set equal to OTV divided by quota.

Why does my commission jump so dramatically when I cross a quota threshold?

This is the cliff effect of whole-stack commission plans, and it's intentional.

In a whole-stack plan, the tier rate applies to your total revenue booked — not just the revenue above the threshold. So when you cross from one tier to the next, two things happen simultaneously: you earn the higher rate on the additional revenue you just closed, and you earn the higher rate retroactively on everything you'd already booked.

The math amplifies as your existing book grows. A rep who has already booked $450k and crosses the $600k quota threshold (moving from an 8% to a 12% accelerator rate) earns the 4% rate difference on both the new $150k and the existing $450k. That's $36,000 in additional commission for closing what might have been a single deal.

This is why end-of-quarter sales behavior looks the way it does. Reps with a realistic chance of hitting the next tier have a disproportionately strong incentive to close — the payoff is significantly larger than the marginal revenue alone would suggest. The "Commission Uplift At Next Tier" field in this calculator shows that number explicitly, so you always know exactly what's at stake.

What is quota attainment, and what does it mean to hit 100%?

Quota attainment is the percentage of your assigned sales quota that you've actually closed. A rep with a $600,000 annual quota who has booked $450,000 in revenue is at 75% attainment.

Hitting 100% attainment means closing your full quota — it's the threshold at which most variable compensation plans pay out the full OTV. Accelerator rates typically kick in above 100%, paying higher commission rates on every additional dollar of revenue.

A few things to understand about attainment figures:

• It's cumulative. Quota attainment is usually measured over a defined period (annual, semi-annual, or quarterly), and it accumulates throughout that period. A rep at 75% in August has the remaining months to close the gap.
• 100% isn't always the payout cliff. Some plans have a "ramp" structure that pays reduced rates below a certain threshold (50% or 75% of quota) and full rates above it, rather than paying linearly from dollar one. The tier structure you configure in this calculator determines exactly where your own plan's inflection points are.
• Quota difficulty varies by company. Industry benchmarks suggest that well-designed quota plans result in roughly 60–70% of the sales team hitting 100% or more. If far fewer are hitting quota, the quota may be set too aggressively; if nearly everyone hits it easily, it may be too loose — which eventually leads the company to raise it.

What is a typical commission rate for a B2B sales rep?

Commission rates vary significantly by industry, deal size, sales cycle, and whether the rep is in a new business or account management role. Broad benchmarks:

• SaaS and software: Target commission rates (at 100% quota) of 8–15% of annual contract value (ACV) are common for new business AEs. The rate tends to be lower for larger deal sizes with longer sales cycles, and higher for high-velocity, smaller deals.
• Enterprise sales with long cycles: Rates of 3–7% are typical, reflecting that deals are larger and the support infrastructure (SEs, legal, professional services) is more involved.
• Transactional or channel sales: Can range from 2–5% on revenue where volumes are high and the rep's role is more order-taking than consultative.
• Recurring revenue considerations: Some companies pay a reduced rate on renewals (30–50% of the new business rate) since renewal revenue requires less effort. Others pay equally on new and renewal ARR to incentivize retention.

The underlying logic that should govern rate-setting: at 100% of quota, the commission payout (OTV) should represent roughly 20–30% of the rep's total OTE for an inside sales role, or 40–60% for a pure hunter/new business role where more upside is expected in exchange for higher performance risk. If you set the Tier 3 rate equal to OTV divided by annual quota, this calculator enforces that relationship automatically.