Total Target Cash

Intro to Total Target Cash

Total target cash represents the complete cash compensation an employee can expect to earn when meeting performance expectations. It combines base salary with target incentive payments, providing a comprehensive view of earning potential. This metric helps organizations design competitive compensation packages and enables employees to understand their full cash earning opportunity.

Definition of Total Target Cash

Total target cash (TTC) is the sum of an employee’s base salary plus their target variable compensation, typically expressed as an annual amount. The base salary represents the fixed portion paid regardless of performance, while target variable compensation includes bonuses, commissions, or incentive payments an employee receives when achieving predetermined goals.

For example, if an employee has a base salary of $80,000 and a target bonus of 20% ($16,000), their total target cash equals $96,000. This figure assumes the employee meets performance expectations but does not include equity compensation, benefits, or above-target incentive earnings. TTC provides a standardized way to communicate compensation potential and compare pay across different roles and organizations.

Importance of Total Target Cash in HR

Total target cash serves as a critical benchmark for competitive compensation analysis. Organizations use TTC to position themselves in the talent market and ensure pay equity across roles with different compensation structures. A sales role with lower base salary but higher variable pay might have similar TTC to a finance role with higher base and lower bonus potential.

Moreover, TTC transparency improves recruitment outcomes. Candidates can accurately compare offers from different employers, even when compensation structures vary significantly. This clarity reduces confusion and helps job seekers make informed career decisions based on realistic earning expectations.

From a retention perspective, clearly communicating total target cash helps employees understand their full compensation value. Many employees focus primarily on base salary and undervalue their total earning potential. By highlighting TTC, organizations demonstrate the complete value proposition and strengthen retention efforts.

Additionally, TTC supports internal equity analysis. HR teams can identify pay disparities more effectively when comparing total cash compensation rather than just base salaries. This comprehensive view, similar to reviewing a detailed pay stub, ensures fair compensation practices across the organization.

Examples of Total Target Cash

Example 1: Sales Executive Compensation
A software sales executive receives a base salary of $70,000 with a target commission of 100% of base when achieving quota. The total target cash is $140,000 ($70,000 base + $70,000 target commission). If the executive exceeds quota, actual earnings could surpass TTC, but the target figure represents expected compensation at 100% goal achievement.

Example 2: Marketing Manager Pay Structure
A marketing manager earns $90,000 base salary with an annual performance bonus target of 15%. Their total target cash equals $103,500 ($90,000 + $13,500). The bonus payout depends on achieving departmental objectives and company performance metrics, with payments typically made quarterly or annually.

Example 3: Customer Success Director Package
A customer success director has $110,000 base salary and qualifies for both a 10% individual performance bonus and a 5% company profit-sharing bonus. Their total target cash is $126,500 ($110,000 + $11,000 + $5,500). This structure aligns individual performance with overall business success.

How HRMS Platforms Like Asanify Support Total Target Cash

Modern HRMS platforms automate total target cash calculations by integrating base salary data with variable compensation plans. These systems maintain accurate records of each employee’s compensation structure, automatically calculating TTC whenever salary or incentive targets change.

Advanced platforms provide compensation modeling tools that allow HR teams to simulate different TTC scenarios during budget planning and job offer preparation. These tools help ensure competitive positioning while maintaining budget constraints. Dashboards display TTC distributions across departments, roles, and levels, enabling comprehensive compensation analysis.

Furthermore, HRMS systems support transparent compensation communication through employee self-service portals. Employees can view their total target cash alongside actual earnings, helping them understand how their performance impacts total compensation. Integration with performance management modules connects goal achievement directly to incentive payouts.

Reporting capabilities enable comparison of TTC against market benchmarks and facilitate pay equity audits. Some platforms also integrate with attendance tracking systems to ensure accurate calculation of prorated bonuses for employees with variable schedules or mid-year starts.

FAQs about Total Target Cash

Does total target cash include benefits and equity compensation?

No, total target cash includes only cash compensation: base salary plus target variable pay such as bonuses and commissions. It excludes benefits like health insurance, retirement contributions, stock options, equity grants, and other non-cash compensation elements. Total target cash is a subset of total compensation, which encompasses all forms of rewards.

How is total target cash different from on-target earnings?

Total target cash and on-target earnings (OTE) are essentially the same concept, referring to base salary plus target incentive compensation. The term “on-target earnings” is more commonly used in sales roles, while “total target cash” is the broader HR terminology used across all functions and industries.

Should job postings include total target cash figures?

Many organizations now include TTC ranges in job postings, especially in jurisdictions with pay transparency laws. Disclosing total target cash helps attract qualified candidates by providing complete compensation information upfront. However, companies should clearly specify that the variable portion depends on performance achievement and explain how incentives are structured.

How do you calculate total target cash for part-time employees?

For part-time employees, total target cash is typically prorated based on their work schedule compared to full-time equivalents. For example, an employee working 20 hours per week (50% of full-time) would have TTC equal to 50% of the full-time base salary plus 50% of the target bonus for that role.

Can total target cash change during the year?

Yes, total target cash can change due to promotions, salary adjustments, or modifications to incentive plan structures. When changes occur, organizations should communicate the new TTC clearly to affected employees. Mid-year changes may result in blended TTC calculations where part of the year reflects the old structure and part reflects the new one.