All About Estates
By Douglas Buchmayer
November 4th, 2025
Executor compensation can be a challenging and sometimes uncomfortable topic to address… For potential executors, clarity about compensation helps them make informed decisions about accepting the role.
If the will does not mention compensation, the default rule under section 61 of the Trustee Act (Ontario) is that a trustee (which includes an executor) is entitled to fair and reasonable compensation for their work, unless the will or trust document specifically provides otherwise. Although there is no set statutory rate, case law has established that 5% of the gross value of the estate is generally considered standard.
Under the Income Tax Act (Canada), compensation paid to an executor is treated as taxable income. For lay executors (such as friends or family members), it is treated as employment income, and the estate is regarded as an “employer” with all the associated reporting obligations. For professional executors, compensation is treated as taxable income from an office, and HST is also payable.
When professionals or trust companies are appointed as executors, compensation is rarely a surprise, as their fees are usually set out in a separate agreement referenced in the will or trust document. However, for lay executors, expectations are often unclear.
Some clients may be surprised by the level of compensation that an executor is entitled to claim. While some lay executors may decide not to take any compensation, or may accept a reduced amount, it is generally unreasonable to expect an executor to work for free or for less than the standard rate, given the considerable amount of work involved—something beneficiaries may not always recognise.
Including a provision in the will that no compensation will be paid can discourage someone from agreeing to act as executor.
