Calculate OTE, Pay Mix, and Commission Rate
Calculate a simple commission rate from OTE, pay mix, and quota while checking whether the math supports motivation.
Design the base commission math for an AE role with $180K OTE, a 60/40 pay mix, and a $900K annual quota. OTE x variable percentage = target incentive. Target incentive / quota = target commission rate. The common trap is choosing a commission percentage first. That hides whether target earnings, quota, and affordability actually fit together. Step 1 $180K OTE x 60% base = $108K base salary. Pay mix translates the earnings promise into fixed and variable components. Step 2 $180K OTE x 40% variable = $72K target incentive. Target incentive is the amount the rep should earn for target…
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