Capped on-target earnings (OTE) have a maximum limit that reps can reach. This means they stop earning commission once they hit quota, no matter how much more they sell. Uncapped OTE has no upper limit, so sales reps aren't penalized for exceeding expectations. They earn all their commission, no matter how much they sell. This encourages reps to be extra active in prospecting and closing deals because they can increase their earnings with each one.