OTE, or 'On-target Earnings', is a term primarily used in sales jobs and includes the basic salary plus the variable component like commissions or bonuses that an employee can earn if they meet their targets.
In India, the OTE salary structure is not regulated by any specific law. However, the salary components are governed by various laws. Here's a basic breakdown:
1. Basic Salary: This is the fixed component and forms the largest chunk of the salary structure. It is fully taxable.
2. House Rent Allowance (HRA): This is given to meet the cost of a rented house taken by the employee for his stay. The Income Tax Act allows for deductions in respect of the HRA paid to employees.
3. Leave Travel Allowance (LTA): This is the amount provided by the employer to the employee for travelling on leave. This can be claimed for tax deductions as per the Income Tax Act.
4. Bonus: This is paid to the employees over and above the basic salary. The Payment of Bonus Act, 1965 provides for the payment of bonus to persons employed in certain establishments, employing 20 or more persons, on the basis of profits or on the basis of production or productivity.
5. Provident Fund: Both the employer and employee contribute to the PF. The percentage of PF contribution is prescribed by the Employees' Provident Fund Organisation (EPFO).
6. Gratuity: This is governed by the Payment of Gratuity Act, 1972. It is a sum of money paid by an employer to an employee for services rendered in the company. However, gratuity is paid only to employees who complete five or more years with the company.
7. Professional Tax: This is a tax levied by the state government and the amount varies from state to state.
Please note that the variable component of the OTE (like commissions or bonuses) would be subject to the terms and conditions set by your employer and can vary widely between different companies or sales roles. It's always a good idea to clarify these details with your HR department or refer to your employment contract for specifics.