How is executor compensation actually calculated in Ontario?

Ontario courts use a guideline built from three components, often called the "care and management fee" formula: roughly 2.5% of the capital receipts coming into the estate, 2.5% of the capital disbursements paid out, and 2/5 of 1% per year of the average value of assets under management for as long as the administration takes. On a straightforward $1,000,000 estate, the receipts-and-disbursements guideline alone works out to roughly $50,000 total — though courts routinely adjust up or down from that starting point.

The percentages are a guideline, not a formula a court is bound to apply. Judges weigh the actual time spent, the skill and difficulty involved — a business, litigation, or out-of-province assets increase compensation, while a simple bank-account-and-house estate reduces it — the results achieved, and whether the estate's size actually corresponds to the work required. A large but simple estate does not automatically justify a large fee.

If beneficiaries and the executor agree on an amount, that agreement can resolve compensation without ever going to court. If they disagree, either side can bring a passing of accounts application, where the executor must justify the fee claimed with records of time and tasks performed.

Because the guideline percentages can significantly overstate or understate fair compensation on an unusual estate, get advice before assuming the standard numbers will simply apply.