Executor fees are stipulated in the will or determined by probate court, and executors can also decline payment.
Serving as an executor is no easy task and comes with some big responsibilities. They are fiduciaries of the deceased's estate, which means they have a legal obligation to act in its best interest as they oversee the probate process and distribute assets to beneficiaries. In addition, executors also have to inventory the property, pay taxes, and settle debts on behalf of the estate. As such, it's reasonable that executors would receive compensation for their work.
Executors fees are usually stipulated in a person's last will and testament, and if there is no will, then how much the executor is paid will depend on state law, which may have guidelines for how much they should be paid.
Executor fees are typically included in the will as a flat rate or percentage of the estates
State law also provides guidelines on calculating executor fees
Any payment you receive from serving as executor is subject to income tax, but you can decline payment
Executors can be paid a flat fee, an hourly rate, or a percentage based on the gross value of the estate. When the fees are based on the estate value, they are usually tiered — like 4% of the first $100,000 of the estate, 3% of the next $100,000, and so on. The person who writes the will (testator) specifies how much the executor should be paid, and one method might be more common in a given state. Executors who go beyond the scope of normal duties (by performing "extraordinary duties," like handling business interests or litigation) are also typically entitled to get paid more.
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When someone fails to specify how much the executor should be paid or dies without a will, the court may determine how much the executor should be paid. Here are a few examples of how executor compensation is generally calculated in different states. If you have more specific questions, like what’s countable in the value of the estate, you should consult with an estate attorney.
Based on estate value:
4% on the first $100,000
3% on the next $100,000
2% on the next $800,000
1% on the next $9 million
0.5% on the next $15 million
A reasonable amount determined by the court on amounts over $25 million
If you’re the executor of an estate worth $500,000 then you can expect to be paid $13,000, according to the compensation rates laid out in California’s probate code. 
Related article: How to make a will in California
Based on estate value:
5% for the first $100,000
4% on the next $200,000
3% on the next $700,000
2.5% on the next $4 million
2% on anything above $5 million
If you’re the executor of an estate worth $500,000 then you can expect to be paid $19,000 according to the compensation rates in New York’s probate code. 
Related article: How to write a will in New York
Based on the value of the estate:
4% on the first $100,000
3% on the next $300,000
2% on anything more
1% on the value of real property that isn't sold
If you’re the executor of an estate worth $500,000 then you can expect to be paid $15,000 based on Ohio probate guidelines. 
Related article: A guide to Ohio wills
Executors receive 5% of the value of any money they actually receive or pay out in cash while handling their duties. They should not count any cash that was already in the decedent's bank account at the time of death though.
If the estate is worth $500,000, but $450,000 is money already in the decedent's savings, checking, investment, and money market accounts, then the executor would receive $2,500 according to legal statutes in Texas. 
Related article: How to make a will in Texas
Executors are entitled to reasonable compensation, but what is reasonable is not clearly defined by the law.  It is customary for executor fees in Illinois to be calculated on an hourly rate based on the executor’s ability, time spent, difficulty of services rendered, and other factors about the estate — but not the dollar value of it. There is legal precedence for not using a percentage of the estate to determine executor fees. 
See also: How to make a will in Illinois wills
Money that the executor is paid for their duties is considered income, and executors are required to disclose their earnings when filing an income tax return.
Some executors may choose to waive the payment, especially if they will be receiving assets from the estate — you typically don't have to pay taxes on an inheritance, unless you live in one of six states with a state-level inheritance tax.
If you’re the executor of an estate and also one of multiple beneficiaries of the will, you may also consider declining payment if you think it would cause a family dispute. For example, if your siblings are also beneficiaries of the will, you could end up receiving more money or assets than them in total because of the executor fees. With larger and even medium-sized estates, executor fees can be substantial — something to keep in mind in case your siblings feel like they're being cut out of their inheritance.
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