What does OTE mean in a salary package?

OTE stands for On-Target Earnings. It is the total compensation an employee can expect to earn if they meet all performance targets, typically combining a base salary with commission or bonus. OTE is common in sales roles but is not a regulated term under Australian employment law. Actual earnings may be higher or lower depending on performance.

How does OTE compare to the Australian full-time average?

There is no official average OTE figure published by the ABS or Fair Work. However, the national full-time adult ordinary-time average is $2,083.70 a week, or about $108,352 a year (ABS Average Weekly Earnings, May 2026). Many sales roles with OTE packages aim to exceed this average, but individual results vary widely by industry and employer.

Is OTE considered part of your salary for tax purposes?

Yes, the ATO treats all earnings from employment, including commissions and bonuses, as assessable income. Your OTE package is taxed at your marginal rate plus the Medicare levy. For 2026–27, tax rates start at nil up to $18,200, then 15% to $45,000, 30% to $135,000, 37% to $190,000, and 45% above that, plus a 2% Medicare levy.

What is OTE in salary and how it compares to the Australian full-time average

What is OTE in salary?

OTE stands for On-Target Earnings. It is a compensation structure often used in sales and business development roles. An OTE package includes a base salary plus a variable component—usually commission or bonus—that is paid when the employee meets predefined performance targets. The idea is that if you hit your targets, your total pay reaches the OTE figure. If you exceed targets, you may earn more; if you fall short, you earn less.

OTE is not a legal term defined by Fair Work or the ATO. It is an employer-driven concept. There is no official Australian statistic for average OTE, because the structure varies so much between companies and industries. Some roles advertise an OTE of $80,000, others $200,000 or more. The key is that OTE is a target, not a guarantee.

Where OTE sits against the national full-time average

The most reliable benchmark for full-time earnings in Australia is the ABS Average Weekly Earnings survey. For May 2026, the national full-time adult ordinary-time average was $2,083.70 per week, which works out to about $108,352 a year (multiplying by 52 weeks). This is the figure used by this site as the line for full-time pay.

OTE packages in many professional sales roles are set above this average, especially in industries like technology, finance, and real estate. However, there is no published average OTE to compare directly. If you are considering a role with an OTE, it is useful to ask what proportion of employees actually reach the target, and what the base salary is. The base alone may be below the national average, with the OTE bringing you to or above it.

Other benchmarks to keep in mind

Full-time median earnings: The ABS reports that the median weekly earnings for all employees (not just full-time) were $1,436 in August 2025, or about $74,672 a year. For full-time employees specifically, the median is higher—around $90,532 a year. These medians are lower than the average because averages are pulled up by high earners.
Men’s and women’s averages: The ABS May 2026 data shows men’s full-time ordinary-time average at about $113,412 a year, and women’s at about $100,594. OTE roles may reflect these gaps depending on industry representation.
Minimum wage: From 1 July 2026, the national minimum wage is $26.44 an hour, or $1,004.90 a week on a 38-hour week, equating to about $52,255 a year. Award minimums rose by 4.75%. OTE roles almost always pay above the minimum, but the base salary component must still meet award or minimum wage obligations.

State-by-state full-time averages

If you are comparing an OTE offer in a specific location, the state averages from the ABS May 2026 release are useful:

New South Wales: ~$109,658
Victoria: ~$106,137
Queensland: ~$106,064
South Australia: ~$102,450
Western Australia: ~$115,825
Tasmania: ~$96,008
Northern Territory: ~$103,173
Australian Capital Territory: ~$119,090

See the states and territories page for more detail.

How OTE is taxed

For the ATO, all components of your OTE—base salary, commissions, bonuses—are ordinary income. They are taxed at your marginal rate plus the 2% Medicare levy. The 2026–27 tax rates are:

Nil on the first $18,200
15% on income between $18,201 and $45,000
30% on income between $45,001 and $135,000
37% on income between $135,001 and $190,000
45% on income above $190,000

If your OTE is $108,352 (the national average), you would be in the 30% bracket plus Medicare levy, meaning a marginal rate of 32%. Your employer may withhold tax from each pay period based on your expected total earnings.

Understanding the limits of OTE

Because OTE is a target, it is not the same as a guaranteed salary. When evaluating a job offer, look at:

The base salary – this is the guaranteed minimum.
The variable component – how it is calculated, how often it is paid, and whether it is capped.
The historical achievement rate – ask what percentage of employees in the role hit the target.

For more context on how different occupations and industries pay, see the job medians and industry medians pages.

Summary

OTE is a common but unregulated term in Australian salary packages. There is no official average OTE figure. The best reference point is the national full-time ordinary-time average of $108,352 a year from the ABS. Many OTE roles aim to exceed this, but actual earnings depend on performance. Always check the base salary and the achievability of targets before relying on an OTE figure.

For more on how the figures on this site are set, visit How the figures are set.