Yes, an executor does get paid, and the money comes out of the estate before beneficiaries receive their shares. How much depends on the state, what the will says, and how complex the administration turns out to be. Total compensation usually falls somewhere between 1% and 5% of the estate’s gross value, with larger estates paying a smaller percentage on each additional dollar. Whether accepting that fee is actually a good idea is a separate question, especially if you are also inheriting from the estate.
How the Fee Is Set
States take one of two approaches. Some publish a statutory schedule that pays a set percentage on a sliding scale: the first tier of assets might pay 4% to 5%, and the rate steps down as the estate grows. On a $500,000 estate in a statutory state, total compensation might land somewhere around $10,000 to $15,000. On a $2 million estate, the blended rate drops, and fees might fall in the $30,000 to $50,000 range depending on the brackets. Exact numbers vary widely by jurisdiction.
Other states use a “reasonable compensation” standard and leave the amount to the probate court. Judges look at what executors in similar estates in the same area have historically received, then adjust for the specific circumstances. The result is less predictable but can bend to unusual demands.
A will can override either approach by naming a flat fee, an hourly rate, or a different percentage. When the will names a figure, the executor can usually take that amount or elect the statutory amount instead, whichever is greater, but not both. If the will is silent in a reasonable-compensation state, the executor and beneficiaries can sometimes agree on a fee, subject to court approval.
Professional executors, such as bank trust departments, corporate fiduciaries, attorneys, and CPAs, either follow their own published schedules or bill hourly. Their expertise can justify higher pay, but courts also hold them to a higher standard of performance.
What Courts Treat as Reasonable
Whether the state uses a schedule or a discretionary standard, judges weigh the same factors when a fee is challenged:
- Size and mix of assets. An estate with rental properties, a business, and brokerage accounts is a bigger job than one bank account and a house.
- Time spent inventorying assets, communicating with beneficiaries, managing property, and preparing accountings.
- Skill required, particularly for tax audits, creditor disputes, or investment decisions.
- Results achieved, such as favorable sale prices or disputes resolved without litigation.
- Difficulty of specific duties, including selling commercial real estate or handling estate-related lawsuits.
Extra Pay for Extraordinary Work
Standard fees cover routine administration. When the work goes well beyond that, most states let the executor petition the court for additional compensation. The bar is high. Common qualifying examples include running the deceased person’s business to preserve its value, handling complex tax audits or litigation, and selling difficult property like undeveloped land or fractional interests. The executor has to petition separately, document what they did, and explain why it exceeded normal duties. Courts have broad discretion, and not every request is granted.
Reimbursement Is Separate from the Fee
Executor compensation and expense reimbursement are two different things. Whether or not an executor takes a fee, they can recover legitimate out-of-pocket costs incurred while administering the estate: court filing fees, postage, mileage for estate-related travel, notary costs, document retrieval fees, storage, and payments to appraisers, accountants, and other professionals hired for the estate. Keep receipts and a detailed log. The estate pays these before beneficiaries receive their distributions, and full reimbursement rights survive even a total waiver of the fee.
Taxes on the Fee
Every dollar of executor compensation is taxable income.1Internal Revenue Service. Publication 559 (2025), Survivors, Executors, and Administrators Federal law defines gross income to include compensation for services, and executor fees are not an exception.2Office of the Law Revision Counsel. 26 U.S. Code 61 – Gross Income Defined
Where the fee gets reported depends on whether you serve professionally or as a one-time obligation. A family member or friend handling the role in an isolated instance reports the fee as “Other income” on Schedule 1 (Form 1040), line 8z. Someone in the trade or business of serving as a personal representative reports the fee as self-employment income on Schedule C and owes self-employment tax on top of income tax.1Internal Revenue Service. Publication 559 (2025), Survivors, Executors, and Administrators
Nonprofessional executors generally do not owe self-employment tax. The narrow exception applies when the estate includes a trade or business, the executor actively participates in running it, and the fee relates to that operation. All three conditions must be met. Collecting bank accounts, selling a house, and distributing proceeds does not trigger self-employment tax.
On the estate’s side, executor commissions are deductible administration expenses, provided the amount matches what is customary for estates of similar size and character in the jurisdiction.3eCFR. 26 CFR 20.2053-3 – Deduction for Expenses of Administering Estate In 2026, the federal estate tax exemption is $15 million per individual, so this deduction only matters for estates above that threshold.4Internal Revenue Service. What’s New – Estate and Gift Tax
Should You Waive the Fee?
This is the calculation that catches most family executors off guard. If you are both the executor and a beneficiary, taking a fee means paying income tax on money that would otherwise reach you tax-free as an inheritance. Say you are entitled to a $20,000 fee and you are also inheriting most of the estate. That $20,000 fee is taxed as ordinary income. At a combined federal and state marginal rate of 30%, you net roughly $14,000. If you waive the fee, the same $20,000 stays in the estate and passes to you as an inheritance, which carries no federal income tax, and you keep the full amount.
The trade-off is that waiving the fee also eliminates the estate’s deduction for that commission. For estates below the $15 million federal exemption, the deduction has no value anyway, so the waiver is close to a pure win for the executor-beneficiary. For estates that owe estate tax, the analysis is more involved.
If you plan to waive, do it formally and promptly. The IRS addressed the timing issue in Revenue Ruling 56-472, which requires the waiver to be executed within a specific window to avoid the fees being treated as constructive income.
When Courts Cut or Deny the Fee
Compensation is not automatic. Probate courts can reduce or deny fees when the executor has failed to perform, and the threshold is a breach of fiduciary duty read broadly. Conduct that puts the fee at risk includes:
- Unreasonable delays that force beneficiaries to wait years for distributions.
- Refusing to give beneficiaries information about estate assets, transactions, or the status of administration.
- Missing tax filing deadlines and triggering penalties and interest against the estate. Courts have held executors personally liable for those penalties and denied their commissions for lack of supporting evidence.
- Forcing beneficiaries into court through stonewalling or mismanagement.
- Self-dealing, transfers that render the estate insolvent, or favoring one beneficiary without legal basis.
Courts look at whether the executor’s conduct caused actual harm, unnecessary expense, or prejudice to beneficiaries. Even without theft, a pattern of neglect or nontransparency can be enough. If you anticipate a dispute, keep meticulous records of every action taken, every hour spent, and every decision made. That documentation is often the difference between full compensation and a reduced award.