To calculate executor fees, start with what the will says, fall back to your state’s statutory formula if the will is silent, and apply the resulting rate or schedule to the gross value of the probate estate. Fees typically land somewhere between 1% and 5% of that value, they come out of estate assets before beneficiaries are paid, and the executor owes income tax on whatever is collected. The rest of the math depends on which of three systems your state uses and which assets actually pass through probate.
What Sets the Fee in the First Place
Three sources can establish executor pay, and they follow a clear order.
The will comes first. A decedent can write in a flat dollar amount, an hourly rate, or a percentage of the estate, and that instruction overrides any default state formula. An executor who finds the will’s number too low can usually renounce that specific provision and claim the statutory fee allowed under state law instead.
When the will is silent, state law fills the gap. Roughly half the states have statutes that set a specific percentage-based formula tied to estate value. The other states leave it to the probate court to decide what’s “reasonable.” Even in statutory-formula states, courts keep authority to adjust fees for unusually complex or simple estates.
In reasonable-compensation states, judges weigh how much time the executor spent, how complex the assets were, any special skills the executor brought, whether the executor saved the estate money or increased its value, and whether administration was efficient and in good faith. An executor’s regular hourly rate at their day job sometimes serves as a benchmark.
Running the Percentage Math
States with statutory schedules use tiered percentages. The rate shrinks as the estate’s value climbs, so executors of larger estates earn a smaller cut on each additional dollar. Three structures show up:
- A steep front-end schedule that starts at 5% on the first $100,000, drops to 4% on the next $200,000, then 3% on the next $700,000, with lower rates above that.
- A flatter structure allowing roughly 2% to 3% of total estate value without graduated tiers.
- A receipts-and-disbursements model that calculates the fee as a percentage of all money coming into and going out of the estate rather than the estate’s total value.
Each percentage applies only to the portion of the estate within that tier, not the whole estate. Take a $500,000 estate under the first schedule. You’d take 5% of the first $100,000 ($5,000), plus 4% of the next $200,000 ($8,000), plus 3% of the remaining $200,000 ($6,000). The fee comes to $19,000.
What Counts as the Probate Estate
Fees are calculated on the gross value of the probate estate: the total value of assets before subtracting debts, mortgages, or other liabilities. A house worth $600,000 with a $200,000 mortgage still enters the calculation at $600,000.
Only assets that actually pass through probate count. Life insurance with a named beneficiary, joint accounts that transfer on death, retirement accounts with designated beneficiaries, and assets held in a living trust all bypass probate and stay out of the fee calculation. That’s why an executor of a large overall estate can end up with a modest fee if most of the assets were structured to avoid probate in the first place.
Extra Pay for Extraordinary Services
The base fee covers routine work: collecting assets, paying bills, filing basic tax returns. Some jobs demand more, and an executor can petition the court for additional compensation on top of the standard fee.
Work that typically qualifies as extraordinary includes running a business the decedent owned during the probate period, handling complex real estate sales, litigating claims on behalf of the estate, defending a will contest, dealing with tax audits, and resolving contested creditor claims. The common thread is unusual time, skill, or effort beyond what a typical executor faces.
To collect for extraordinary services, the executor files a petition describing what was done, how long it took, and why the work exceeded normal duties. The court decides whether to approve extra pay and how much, and judges have broad discretion to weigh whether the work genuinely benefited the estate.
When Co-Executors Serve Together
Naming two or more co-executors doesn’t automatically double the fee. The rules vary by state, but the general principle is that the estate shouldn’t pay more in total just because multiple people share the role.
Many states have co-executors split a single commission based on the work each person actually performed. Some states allow each co-executor a full commission on larger estates but cap the total at two or three full commissions, with any additional co-executors dividing their share proportionally. Co-executors who can’t agree on the split can ask the probate court to allocate compensation based on each person’s contribution, which is why a detailed log of hours and tasks matters especially here.
Fees vs. Reimbursed Expenses
Executor pay and expense reimbursement are two separate categories, and mixing them up creates tax problems.
The fee is payment for the executor’s labor. Reimbursement covers money the executor spent out of pocket for the estate: travel to court hearings or to manage property, postage and shipping, court filing fees, copies of death certificates, costs of securing or maintaining estate property. The tax difference is the reason to keep the two straight: executor fees are taxable income, while reimbursements for legitimate estate expenses are not. Keep receipts for every out-of-pocket item and document them separately from your fee in the estate’s accounting.
Expenses you paid before the decedent’s death generally aren’t reimbursable, even if they related to getting the estate organized. Costs you take on as a beneficiary, such as moving furniture you inherited, come out of your own pocket.
How Executor Fees Are Taxed
Every executor must include the fee in gross income on their federal return, regardless of the estate’s size or the executor’s relationship to the decedent.1Internal Revenue Service. Are the Fees I Receive as an Executor or Administrator of an Estate Taxable? How you report it depends on whether you’re a professional or nonprofessional executor.
Nonprofessional Executors
If you’re handling the estate of a relative or friend as a one-time service, you’re a nonprofessional executor. Report the fee on Schedule 1 (Form 1040), line 8, as other income.2Internal Revenue Service. Publication 559 (2025), Survivors, Executors, and Administrators Self-employment tax generally doesn’t apply. The exception is narrow: it applies only if the estate includes a trade or business, you actively participated in running that business, and your fees relate to operating it.
Professional Executors
If you serve in a professional capacity, such as a bank trust department, an attorney, or anyone who regularly handles estates as part of their business, report the fee on Schedule C as self-employment income. That means income tax and self-employment tax on the full amount.2Internal Revenue Service. Publication 559 (2025), Survivors, Executors, and Administrators
When Waiving the Fee Makes Sense
If you’re both the executor and a primary beneficiary, taking the fee can cost you money. Fees are taxed as ordinary income; inheritances are generally received tax-free. An executor who stands to inherit a significant share of the estate may come out ahead by declining the fee, since the money that would have been the fee stays in the estate and passes to them as a tax-free inheritance. Whether that math works depends on your bracket, the size of the fee, and the size of your inheritance, so it’s worth running the numbers before deciding.
When and How You Get Paid
Executors don’t take the fee upfront. Payment comes near the end of probate, after the estate’s debts and expenses are identified and before the final distribution to beneficiaries. The fee is treated as an administration expense, which gives it priority over distributions to heirs and often over other debts as well.
Before collecting, the executor prepares a final accounting that documents every financial transaction during administration: income received, debts paid, expenses incurred, assets distributed. The fee appears as an expense in that accounting, which goes to the probate court and to all beneficiaries for review.
If Beneficiaries Object
Any interested party can challenge the fee as unreasonable. Beneficiaries might argue the executor spent little time on the estate, that the assets were straightforward, or that administration was inefficient. Evidence of double-billing or billing for work someone else performed is particularly damaging. The court weighs the objection against the same reasonableness factors used to set fees originally: time, complexity, skill, results, and good faith.
If the court agrees the fee is excessive, it can reduce the amount. Once the court approves the final accounting, the executor is authorized to take payment from estate funds before distributing the remaining assets. An executor who pays themselves an unauthorized or excessive fee without court approval risks being surcharged, meaning a court can order them to return the overpayment to the estate.