How much is an executor (estate trustee) paid in Ontario?

What the law actually says

Section 61 of the Trustee Act entitles an estate trustee to “such fair and reasonable allowance for the care, pains and trouble, and the time expended in and about the estate” as the court allows. No percentage appears anywhere in the statute. The percentages every article quotes are a court-developed convention, used as a starting point and then tested against the facts of the estate.

The usual calculation

The convention taxes each dollar that moves through the estate: 2.5 percent of capital receipts, 2.5 percent of capital disbursements, and 2.5 percent of revenue receipts and revenue disbursements. In a typical estate that combination lands near 5 percent of the estate’s value. Where an estate is actively managed over a long administration, courts can also allow a care and management fee of two fifths of one percent per year of the average value of the assets, though it is discretionary and far from automatic. Because the home is usually the biggest capital receipt, the sale is usually the biggest driver of the fee, and the courts expect the sale to have earned it: a documented, open-market sale at fair value.

The cross-check is a five-factor test that Ontario courts have applied for over a century, from Re Toronto General Trusts Corp. and Central Ontario Railway: the size of the estate, the care and responsibility involved, the time spent, the skill and ability shown, and the success of the administration. The percentages bend to the factors, not the other way around. In Baer v. Baer, an Ontario court cut claimed compensation of about $36,000 to $15,000 after the trustees breached their duties on a below-value sale.

The tax surprise most families miss

An inheritance is not taxed as income. Executor compensation is. For a non-professional executor the CRA treats the fee as income from an office, which means the estate opens a payroll account, withholds income tax and CPP, and issues a T4. That mechanical difference drives a common family decision: an executor who is also a major beneficiary often waives the fee entirely, because a dollar taken as inheritance arrives whole and a dollar taken as compensation arrives taxed. Where the executor is not a significant beneficiary, the fee is the fair price of a demanding job. Both are legitimate; the point is to decide deliberately, ideally with the accountant in the room.

How the fee gets approved

Compensation is settled one of two ways. The cheap way: the beneficiaries unanimously approve the accounts, releases are signed and the fee is paid. The expensive way: a court passing of accounts, where beneficiaries can object line by line. Everything that makes the cheap way available is the same discipline that runs through the whole role: clean accounts, documented decisions and a sale record that shows the estate’s largest asset was handled properly. Trustees who can show that rarely end up in front of a judge over their fee.

This is general information for Ontario, not legal or tax advice. Compensation questions, and the payroll mechanics if a fee is taken, belong with the estate’s lawyer and accountant.