How much to set as compensation for an executor will vary from estate to estate. Some estates have high dollar values but are fairly straightforward to complete. Other times, the opposite is true. In some cases, a % is a fair compromise, and in others a fixed dollar amount makes more sense.
A good estate planning lawyer will discuss relevant factors, as outlined in the info provided by Troutman above, to help you come up with what is fair compensation.
Regarding the question of executor fees as taxable income, the Ontario Bar Association circulated a useful bulletin on this question a few years ago:
https://www.oba.org/Sections/Taxatio...-Se?lang=fr-ca