A good starting point when creating a sales compensation plan is to base OTE on one-fifth of a rep's annual quota. At that rate, an annual sales quota of $1,000,000 means reps who hit 100% would earn $200,000 that year. Keep in mind this is just a starting point. In highly competitive markets, companies may need to increase OTE ratios to attract and retain top salespeople. Startups might want to offer their first reps higher percentages or revenue share to level the playing field with more established companies. And some companies might have newer reps earn lower commission percentages until they become more experienced.