Executor compensation in the United States generally runs between 2% and 5% of the probate estate’s value, but how much an executor should be paid depends on three things in order: what the will says, what state law allows when the will is silent, and what a probate court considers reasonable for the work involved. The money comes out of the estate itself, not from the beneficiaries directly, and it is taxable income to the person who receives it.
What Sets the Number
The will controls first. If the person who wrote it included a compensation clause, that clause governs, whether it names a flat dollar amount, a percentage, an hourly rate, or no pay at all. Wills that direct the executor to serve without compensation are common when a spouse or adult child is named. An executor who finds the will’s terms unacceptably low can usually renounce that provision and ask for statutory compensation instead, though the mechanics vary by state.
When the will says nothing, state law fills the gap. Roughly a fifth of states set a specific fee schedule, usually a tiered percentage of the estate’s value. A smaller group applies a single flat percentage. Most states simply tell courts to award “reasonable compensation,” which leaves the judge to weigh the actual work done.
In those reasonable-compensation states, a court looks at the size and complexity of the estate, the hours the executor logged, the skill the job required, the results the executor achieved for the estate, and whether the administration was handled efficiently and in good faith. A straightforward estate with a house and a couple of bank accounts sits at the low end. An estate with business interests, tax complications, or contested claims sits higher. Dragging things out or acting carelessly can cut the award.
How Percentage Fees Are Calculated
States with statutory schedules almost always tier the percentage: a higher rate on the first slice of estate value, lower rates as the value climbs. A common pattern allows something like 4% on the first $100,000, 3% on the next portion, and 2% on amounts above that. Some states start as high as 7% to 10% on the first $1,000 and drop quickly from there; others stay flatter throughout.
The tiering matters because the top rate does not apply to the whole estate. On a $500,000 estate under a 4%/3%/2% schedule with breakpoints at $100,000 and $300,000, the fee works out to $14,000, or 2.8% of the total, not 4%. People who assume the headline rate applies across the board are usually surprised on the low side.
Percentage is not the only structure. A will can specify a flat fee or an hourly rate, and beneficiaries and the executor can agree to one. Attorneys and accountants serving as executors often prefer hourly billing because it lines up better with how they price other professional work.
Which Assets the Fee Is Calculated Against
The percentage applies to the probate estate, not to everything the deceased owned. The probate estate covers assets held solely in the deceased person’s name: bank and investment accounts, real property titled only to them, vehicles, jewelry, and other personal belongings. It also includes debts owed to the deceased and lawsuit proceeds belonging to the estate.
Assets that transfer automatically at death are not part of the calculation. Life insurance paid to a named beneficiary, retirement accounts with beneficiary designations, jointly held property that passes by survivorship, and assets already held in a trust all bypass probate. On a wealthy estate where most assets sit in trusts or joint title, the probate estate, and the executor’s fee, can be a small fraction of the total picture.
Banks and Trust Companies as Executor
When no individual wants the job, or the estate is complex enough to justify professional handling, banks and trust companies act as executor for a fee. Corporate executors typically charge between 1% and 1.5% of the estate’s value annually and impose a minimum annual fee, which can make them expensive relative to the size of a modest estate. Their pricing is not negotiable.
If you are drafting a will and considering a corporate executor, ask for the published fee schedule before naming the institution. Some states allow the will to reference the executor’s “regularly published schedule of fees” in effect at the date of death, which locks in the pricing framework.
Extra Pay for Extraordinary Work
Standard fees cover routine administration: collecting assets, paying debts, filing tax returns, distributing property. Work beyond that can support a request for what probate law calls extraordinary compensation. The kinds of tasks that qualify usually involve running a business the deceased owned until it is sold, handling contested litigation for the estate, overseeing renovation and sale of multiple properties, or defending against a will contest or major creditor dispute.
Extra compensation is not a line item the executor can add on their own. It requires a petition to the probate court, backed by detailed records of the hours, the tasks, and the reason the work fell outside normal duties. Courts look at these requests more skeptically than routine fee approvals, so contemporaneous records from day one are worth the trouble.
Out-of-Pocket Reimbursement Is Separate
Reimbursement for expenses the executor pays personally is separate from compensation and does not reduce the fee. Reimbursable items include court filing fees, certified death certificates, postage for legal notices, appraisal fees, and tax preparation the estate owes. Travel is reimbursable when the executor lives at a distance from where the estate is administered. For driving, the standard approach is the IRS business mileage rate, which is 72.5 cents per mile for 2026.1Internal Revenue Service. 2026 Standard Mileage Rates Flights and rental cars for genuine estate business are reimbursable too, with receipts and a documented purpose.
Reasonableness matters. Charging the estate for a first-class flight to do something that could have been handled by phone invites beneficiary objections.
Taxes on Executor Fees
Every dollar of executor compensation is taxable income. The IRS requires personal representatives to include fees they receive from an estate in gross income.2Internal Revenue Service. IRS Publication 559 – Survivors, Executors, and Administrators How it is reported depends on the role.
A family member or friend handling a single estate reports the fees on Schedule 1 (Form 1040), line 8z, as other income. Income tax applies; self-employment tax does not. Someone who acts as a fiduciary for multiple estates as part of a trade or business reports the fees on Schedule C, and they are subject to both income tax and self-employment tax.2Internal Revenue Service. IRS Publication 559 – Survivors, Executors, and Administrators The same self-employment treatment applies if the estate itself runs a business and the executor is actively involved in operating it.
On the estate’s side, commissions are deductible as an administration expense on the federal estate tax return. The deducted amount must be consistent with the accepted standards where the estate is administered, and unusual amounts must be justified to the IRS.3eCFR. 26 CFR 20.2053-3 – Deduction for Expenses of Administering Estate A bequest left to the executor in lieu of commissions (“I leave my executor $20,000 for their service”) is not deductible as an administration expense, even though it does the same job economically.
When Waiving the Fee Makes Sense
Family executors who are also beneficiaries often waive the fee. The reason is tax. A fee is taxable income; an inheritance generally is not. Receiving $15,000 as an inheritance rather than as taxable compensation usually leaves the executor with more money.
The calculation flips on large estates that owe federal estate tax. There, the fee reduces the taxable estate and can save more in estate tax than the executor would pay in income tax. The break-even turns on the estate’s size and the executor’s tax bracket, so running both scenarios with a tax professional is worthwhile. An executor who wants to waive should do so formally and in writing before taking any payments; some states require the waiver to be filed with the probate court.
Getting the Fee Approved and Paid
An executor cannot simply move money from the estate account to a personal one. Payment needs approval by one of two paths. The simplest is written consent from every beneficiary. When everyone signs off, the executor can take the fee without going to court.
When consent is not available, the executor petitions the probate court, usually as part of the final accounting that shows everything that came into and went out of the estate. The court checks the fee against the will or the statute and against the work performed. Fees are generally paid near the end of administration, after debts, taxes, and expenses are settled and before final distributions. Some jurisdictions allow interim compensation during a long administration.
When Beneficiaries Object
Any interested party can challenge an executor’s fee as unreasonable, and beneficiaries are the most common challengers. Arguments that get traction include evidence that the executor spent little time relative to the fee claimed, that the estate was simple and required no specialized skill, that administration was inefficient or handled in bad faith, or that the executor billed for work someone else did. Double-billing is a specific red flag.
Courts weigh the same factors they would use to set the fee in the first place: complexity, hours, skill, efficiency, and whether the executor’s work preserved or grew the estate. Executors who keep detailed records and administer the estate competently rarely lose these disputes. The ones who see fees reduced are usually the ones who cannot explain what they did or how long it took.
Co-Executors
When a will names more than one executor, how the compensation gets divided depends on the state. Some states allow each co-executor a full commission as if they were the sole executor, which multiplies the cost to the estate. Others require the co-executors to split a single fee based on the work each performed. A few states change the rule based on estate size, splitting one fee on smaller estates and allowing multiple commissions up to a cap on larger ones. A will that names co-executors should address the compensation split directly; otherwise, the default state rule applies and disagreements about who did more work can end up before a judge.