An executor (called an estate trustee in Ontario and a liquidator in Quebec) is entitled to be paid for the work of settling an estate, on top of being reimbursed for expenses. How much depends on the province: some set a percentage ceiling in law, others leave it to a “fair and reasonable” amount decided by the court, and in every province a will can set the compensation instead. This page sets out the rules by province, how compensation is taxed, and how it can be waived or challenged. It is part of our estate planning guide; the executor’s duties themselves are in the financial checklist when someone dies, and how the role differs from an attorney’s in the difference between an executor and an attorney.
Executor compensation by province
| Province | What the law provides | Source |
|---|---|---|
| British Columbia | A fair and reasonable allowance not exceeding 5% of the gross aggregate value of the estate, including capital and income, plus a care and management fee, applied for annually, of up to 0.4% of the average market value of the assets | Trustee Act, ss. 88 and 90 |
| Alberta | Fair and reasonable compensation, judged on factors set in the court rules: the estate’s gross value, the receipts and disbursements, complexity, skill and time, tasks delegated and the number of executors; additional compensation for extra roles such as running a business | Surrogate Rules, Schedule 1 |
| Ontario | A fair and reasonable allowance for the executor’s care, pains, trouble and time, as allowed by a judge of the Superior Court of Justice | Trustee Act, s. 61 |
| Manitoba | A fair and reasonable allowance for the executor’s care, pains, trouble and time, as allowed by the court | The Trustee Act, s. 90 |
| Nova Scotia | A commission not exceeding five percent of the amount received by the personal representative, over and above necessary expenses | Probate Act, s. 76 |
| Quebec | A liquidator who isn’t an heir is entitled to remuneration; an heir may be paid if the will provides for it or the heirs agree. If the will doesn’t fix it, the heirs set it, or the court if they disagree | Civil Code of Québec, art. 789 |
Saskatchewan, New Brunswick, Prince Edward Island, Newfoundland and Labrador and the territories have their own trustee and probate legislation, which sets how compensation is allowed there.
Where the law says “fair and reasonable”, courts look at the size of the estate and the work it actually took. In Ontario, courts have long used a percentage of the money the executor received and paid out as a starting point, then adjusted it up or down for the complexity, the time spent and the results; compensation for managing assets held in a continuing trust can be added. A percentage ceiling, as in British Columbia and Nova Scotia, is a maximum, not an entitlement.
Example (British Columbia): for an estate with a gross value of $600,000, the Trustee Act’s ceiling of 5% allows at most $30,000 in compensation; the amount actually allowed depends on the work involved and can be lower.
Setting compensation in the will
Every province lets the will set the executor’s compensation, and when it does, that amount generally replaces the statutory allowance. Ontario’s and British Columbia’s Trustee Acts say their compensation sections don’t apply where the will fixes the allowance; in Alberta no greater amount can be charged unless the beneficiaries agree or the court orders it; and in Nova Scotia a provision in the will is full payment for the executor’s services unless the executor renounces it within the time the Probate Act allows and claims a commission instead. A will can set a flat amount, a percentage, or state that the executor serves without pay, and it can leave a gift to the executor “in lieu of” compensation. How to write those terms into a will is covered in how to make a will in Canada.
Waiving compensation
An executor can choose not to take compensation. Family members who are also beneficiaries often waive it, because compensation is taxable income while an inheritance is not, so taking a larger inheritance instead can leave the family with more after tax. Waiving is usually done in writing early in the administration.
Executor fees and tax
The CRA treats fees an executor earns outside the course of a business as income from an office or employment: the estate reports them on a T4 slip and deducts CPP and income tax (but not EI). Fees earned by someone who acts as an executor in the course of their business (a trust company or a professional) are business income. Reimbursed expenses are not income. The estate’s own tax filings, which the executor is responsible for, are covered in how to file taxes for a deceased person.
Taking compensation, and how beneficiaries can challenge it
In most provinces, executors take compensation when they pass their accounts (present the estate’s accounts to the beneficiaries or the court for approval), either with the beneficiaries’ written consent or with the court’s approval. A beneficiary who thinks the amount is too high can refuse to approve the accounts and ask the court to review them; the court can reduce the compensation. Taking compensation before the accounts are approved, without the will or the beneficiaries allowing it, can leave an executor having to repay it. Alberta’s rules allow compensation to be paid before the administration is complete only in limited circumstances, such as when the will provides for it.
Executor fees and probate fees
Executor compensation is separate from the probate fee the province charges to confirm the will. Both are paid by the estate before the beneficiaries receive their shares; the probate fee schedules are in probate fees by province, and what settling an estate costs overall is in the financial checklist when someone dies.