A B2B sales compensation plan defines the financial structure of a salesperson's earnings: base salary, variable commission tied to a quota, and any accelerators or special incentives layered on top. The comp plan is the clearest signal to a rep about what the company values -- they will optimise for whatever drives their paycheck. A well-designed comp plan creates the exact behaviours you want (new logo acquisition, expansion, specific product attachment); a poorly designed one creates gaming, sandbagging, and unintended consequences that are expensive to unwind.
Core comp plan components
On-target earnings (OTE)
OTE is the total compensation a rep earns when they hit exactly 100% of quota. It is composed of base salary plus variable pay at quota. OTE is the number you use to recruit: a "25L OTE" position tells a candidate their total expected earnings at target. OTE should be benchmarked to market rates for the role, geography, and company stage. India B2B SaaS benchmarks (2025): SDR OTE ranges from 8-15L; AE OTE ranges from 20-40L at growth-stage SaaS; enterprise AEs at funded companies range from 40-80L. US-facing roles (India-based, selling to US) carry a 30-50% premium over India-domestic-focused roles.
Base vs variable split
The base-variable split determines how much of OTE is guaranteed (base) vs at risk (variable). Common splits: 70/30 (70% base, 30% variable) for SDRs and BDRs where activity is the primary output; 60/40 for SMB AEs; 50/50 for mid-market AEs; 40/60 for enterprise AEs who can influence very large deal outcomes. A higher variable percentage increases upside but also increases rep anxiety and turnover risk in lean quarters. For early-stage startups with uncertain quota setting, a higher base/lower variable reduces rep churn when quota accuracy is still being calibrated.
Quota and commission rate
Quota is the target revenue (ARR, ACV, or bookings) that triggers full OTE. Commission rate is the percentage of the deal value paid to the rep. The two are related: if OTE variable is 12L and quota is 1.2 Cr ARR, commission rate is 10%. Quota should be set at a level where 50-70% of reps attain it in a typical quarter -- if fewer than 50% attain quota, it is either set too high, the territory is wrong, or the product is not ready for the market. Commission rates in India B2B SaaS range from 5-12% of ARR depending on deal size (lower rates for larger deals).
Accelerators and decelerators
Accelerators increase the commission rate above a threshold: for example, a rep earns 10% commission up to 100% of quota, then 15% between 100-150%, and 20% above 150%. Accelerators reward overperformance and retain top earners. Decelerators (below-quota commission rates) discourage low attainment. A common structure: reps earn 0% variable below 50% of quota (protecting the company from paying commission on deals that do not justify the cost), then 100% of commission rate between 50-100%, then accelerated rates above 100%.
Special incentives and kickers
Kickers are one-time bonuses for specific deal types or behaviours: new logo kicker (extra 20% commission on any deal with a net-new customer logo), multi-year deal kicker (extra 10% on 2+ year contracts), product attachment kicker (bonus for attaching a specific add-on), or vertical specialisation bonus. Kickers are powerful but can create over-optimisation: if the new logo kicker is large enough, reps will ignore expansion opportunities entirely to chase new logos. Design kickers to complement the primary quota metric, not compete with it.
Frequently asked questions
- What is OTE in B2B sales?
- OTE (on-target earnings) is the total compensation a B2B sales rep earns when they achieve exactly 100% of their quota. OTE = base salary + variable commission at quota. For example, a B2B SaaS AE with a 25L OTE and a 50/50 split earns 12.5L base plus 12.5L variable when they hit 100% of their quota. OTE is used in job listings to signal total expected earnings at target performance. Most comp plans include accelerators above 100% of quota, so top performers earn significantly more than OTE.
- What is a good base-to-variable split for a B2B sales rep?
- Common B2B sales comp splits by role: SDRs and BDRs: 70/30 (70% base, 30% variable) since they are measured on activity and meetings set, not closed revenue. SMB AEs: 60/40. Mid-market AEs: 50/50. Enterprise AEs: 40/60 or even 30/70 for very senior roles with large deal sizes. The right split depends on: how directly the rep controls revenue (enterprise AEs have long, unpredictable cycles and need a higher base to remain stable); company stage (early-stage companies with unproven quotas should pay higher base to reduce rep churn); and market norms (benchmark against what comparable companies in your geography and funding stage are paying).
- How do you set B2B sales quota?
- B2B sales quota should be set at a level where 50-70% of reps attain it in a typical quarter. Too few attaining quota indicates the quota is too high (or territory, product-market fit, or support is insufficient). Too many attaining it indicates the quota is too low (you are paying accelerated commissions earlier than necessary and overpaying relative to the revenue outcome). Quota-setting inputs: company ARR target broken down to team and then individual rep; capacity planning (how many reps, how many months of ramp each); historical attainment data from similar roles. For early-stage startups without attainment history, benchmark against published industry data and set initial quota conservatively, building in a review after the first two quarters.