OTE + benefits + tools + overhead = true cost per rep. Know your sales efficiency ratio before you hire.
OTE is the number candidates negotiate. Fully loaded cost is the number CFOs approve. The gap between them — often 40–60% — is what causes hiring plans to stall at finance review. The components of the fully loaded number include benefits and payroll taxes (typically 20–25% of OTE), sales tools such as CRM, sales engagement, and enablement platforms ($6,000–$15,000/year), manager overhead (each manager typically covers 6–8 reps, so one-seventh of a manager's OTE is a fair allocation), office and T&E, and recruiting cost amortized over the first year.
The sales efficiency ratio is your output metric: revenue generated versus total cost. A rep with $120K OTE who generates $600K in ARR has a 5:1 revenue-to-cost ratio. Most companies look for greater than 3:1 to sustain growth. How to use this in board conversations: model fully loaded cost per rep, multiply by planned headcount, and show the revenue return at realistic attainment levels. This is how you win headcount approvals from finance. Benchmark: fully loaded rep cost is typically 1.4–1.6× OTE for SMB AEs, slightly higher (1.5–1.7×) for enterprise.
OTE plus employer payroll taxes (~8%), benefits (~15%), sales tools ($6K–15K/year), allocated manager cost (~12% of OTE), office and T&E, and amortized recruiting cost. Total is typically 1.4–1.6× OTE. A rep with $180K OTE often costs $260K–$290K fully loaded.
New ARR generated divided by total sales and marketing spend. A ratio of 1.0 means you spend $1 to acquire $1 of ARR. Above 1.5 is considered efficient. Best-in-class PLG companies hit 2.0+. Below 0.7 is a signal to reexamine your go-to-market model.
Total revenue generated by the rep (quota × attainment rate) minus fully loaded cost. Divide by fully loaded cost for ROI %. Show payback period: fully loaded cost divided by monthly revenue contribution. Finance responds well to payback periods under 12 months.
Typical stack: CRM ($200–600/year Salesforce), sales engagement ($1,000–2,000/year Outreach/SalesLoft), LinkedIn Sales Navigator ($1,200/year), call recording ($600–1,200/year Gong/Chorus), and any enablement platform ($500–1,500/year). Total: $3,500–$6,500/rep/year for a standard SMB stack, $8,000–15,000 for enterprise.
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