McNab McNab & Starke understand that the ins and outs of being an executor of an estate can be confusing and stressful. That’s why we’re here to answer one question we’re often asked: what is an executor’s commission?

Executor’s commission is a payment to an executor for the ‘pains’ and ‘troubles’ of carrying out the executorial role. These are separate terms:

  • ‘Pains’ refers to the responsibility, anxiety and worry regarding carrying out the executor role. 
  • ‘Troubles’ refers to the actual work completed by the executor on behalf of the estate. For example, meetings with the solicitor, organising the funeral, and meetings with the accountant.


What Commission Does Not Relate to

Commission does not relate to out-of-pocket expenses or reasonable expenses incurred by an executor when carrying out the tasks of the estate. These costs are reimbursable to the executor by the estate, therefore this is not considered commission.


Declaring Commission

The commission is considered income, which the executor would have to declare for income tax purposes for the year in which the executor receives it.


The Entitlement to Commission

If the deceased does not provide commission to the executor in his/her will, there is no automatic entitlement to commission. To be paid a commission, an executor must obtain approval in one of two ways: 

  1. From the residuary beneficiaries under the will, who must consent to pay the commission the executor seeks. 
  2. An application is made by the executor under Section 65 of the Administration and Probate Act.


How Much Commission is to be Paid

Since commission is meant to be compensation for the specific pains and troubles incurred by the specific executor, the commission payable can vary substantially from estate to estate. Two estates of exactly the same value may have completely different commission amounts determined to be properly payable to the executor.  

As a balance and check system, the court has regard to how any specific commission relates to the estate’s total value. There is a statutory limit of 5% of the value of the estate. The court will not award a figure that exceeds that 5% limit. If there is more than one executor, then the amount of commission paid would be divided equally between the executors, and that figure cannot exceed 5%. 


Contact the Professionals in Victoria

If you need further clarification when it comes to deceased estates and commission of the executor, contact McNab McNab & Starke. You can either send an online enquiry or give your nearest firm a call.