Key Takeaways:
- A notary commission belongs to the individual, not the employer—but most states allow firms to require that fees collected during business hours go to the firm, as long as both parties agree to the arrangement in writing.
- Statutory notary fee caps vary dramatically by state, ranging from $2 per notarization in Georgia to $15 or more in California, Colorado, and Nevada—making a one-size-fits-all policy impossible without checking your jurisdiction.
- How you categorize and track notary fees matters for billing compliance. Whether you pass notary costs to clients, absorb them as overhead, or treat them as firm revenue, a clear policy and proper expense tracking protect you from ethics complaints and accounting headaches.
Picture this: Your paralegal just notarized three sets of closing documents for a real estate matter, two affidavits for a litigation case, and a power of attorney for a walk-in who is not even a client. She glances at the small stack of $10 bills on her desk and wonders—does she pocket those fees, or do they belong to the firm?
Now picture the managing partner down the hall, who has no idea those notarizations even happened, much less whether the fees were collected, waived, or billed to the client. Nobody wrote a policy. Nobody tracks the revenue. And nobody thinks it matters—until it does.
Statutory caps in most states limit what a notary can charge to somewhere between $2 and $15 per act. But multiply those small amounts by hundreds of notarizations per year, across multiple commissioned staff members, and the dollars add up. More importantly, the absence of a clear notary fee policy creates a tangle of compliance risks, staff resentment, and billing inconsistencies that no firm should ignore.
The Legal Foundation: Who Actually Owns the Notary Commission?
Before you can answer the fee question, you need to understand a foundational principle of notary law that surprises many managing partners: a notary commission belongs to the individual, not the employer. This is true in every state, without exception.
When a state’s secretary of state or commissioning authority grants a notary commission, it is issued to the individual by name. The commissioned notary takes an oath of office, just like other public officers. Even when the employer pays for the application fee, training, surety bond, stamp, and journal, the commission itself—and all the supplies—belong to the notary personally. The Texas Attorney General confirmed this in Opinion GA-0723: an employer is not the owner of a notary’s record book or seal, even when the employer paid for the materials.
What the Law Says About Notary Fees During Work Hours
Here is where things get nuanced—and where most firms either get confused or simply do nothing.
According to the American Association of Notaries, it is common and generally permissible for employers to require that notary fees collected during business hours be retained by the employer. This is especially true when the employer paid for the notary commission and when the notarial acts are performed as part of the employee’s job duties.
However, there are important guardrails. The arrangement should be agreed upon in advance, ideally in writing. The policy must be applied uniformly—you cannot charge notary fees to non-clients while waiving them for clients without a consistent rationale. And critically, fees earned by the notary outside of work hours belong to the notary. An employer has no claim to those, regardless of who paid for the commission.
Some states go further with specific statutory language. Oregon, for example, explicitly provides that a notary public employed by a private entity “may enter into an agreement with the entity under which fees collected by the notary public under this section are collected by and accrue to the entity.” That is about as clear as statutory language gets. Other states are silent on the employer-employee fee question, which means the arrangement defaults to whatever the parties agree upon—making a written policy even more critical.
The bottom line: in the absence of a written agreement, a staff notary who collects statutory fees has a reasonable argument that those fees are personally theirs. That ambiguity is exactly what a written policy eliminates.
State Fee Caps: Why Your Policy Needs a Jurisdictional Check
One of the most common mistakes firms make is assuming notary fees are uniform across states. They are not—not even close.
According to the National Notary Association’s 2026 fee schedule, maximum allowable notary fees per act vary widely. Georgia caps fees at just $2 per notarization. Connecticut, Delaware, and the District of Columbia allow up to $5. California, Colorado, and Nevada permit $15 or more. And a handful of states—including Alaska, Arkansas, Iowa, Kansas, Kentucky, Louisiana, and Maine—set no maximum fee at all, leaving it to the notary’s discretion.
For firms operating across multiple jurisdictions, this patchwork means a single notary fee policy must account for different caps in different states. Remote online notarization adds another layer—Florida and Illinois allow up to $25 per remote notarization, while Maryland allows $30.
The practical takeaway: before you write a notary fee policy, pull up the fee schedule for every state where your firm operates and make sure your policy respects those caps. A notary who charges above the statutory maximum faces disciplinary action, potential loss of their commission, and in some states, civil or criminal liability. That liability does not just fall on the notary—it can extend to the firm through vicarious liability.
The Three Common Approaches (and Their Trade-Offs)
In practice, mid-sized law firms tend to handle notary fees in one of three ways. Each has different implications for revenue, morale, and billing compliance.
Approach 1: The Firm Retains All Fees Collected During Business Hours
This is the most common approach, and the one with the strongest legal footing when supported by a written agreement. The logic is straightforward: the employee is being paid a salary to perform their job duties, the firm paid for the commission, and notarizations performed during work hours are part of those duties. Any fees collected are firm revenue.
Firms that take this approach typically either pass the notary fee through to the client as a billable expense on the matter, or absorb the fee as a courtesy and general overhead cost. Either way, the revenue or cost shows up in the firm’s books, not the employee’s pocket.
The trade-off: this approach can quietly erode morale, especially among paralegals and legal assistants who perform the bulk of notarizations. If a paralegal handles 400 notarizations a year in a state with a $10 fee cap, that is $4,000 in revenue flowing to the firm from work the paralegal views as “extra” effort tied to their personal credential. Without recognition or compensation, that can breed resentment.
Approach 2: The Employee Keeps the Fees
Some firms—particularly those that did not pay for the commission—allow staff notaries to retain fees as a small perk. This approach is less common in law firms than in banks or shipping centers, but it does exist.
The logic here is that the commission belongs to the individual, the fee amounts are modest, and letting the employee keep them is a low-cost retention tool. Some firms view it as similar to allowing an employee to keep tips.
The trade-offs are more significant. If the notarization was performed for a firm client, on firm time, using firm resources, the fee arguably should be accounted for somewhere—either as firm revenue or as a billed expense to the client. Letting the employee pocket it without any accounting creates a gap in your expense reporting. It also raises a fairness question: if one paralegal has a notary commission and another does not, the commissioned paralegal earns extra income for performing a task that is functionally part of the same job.
Approach 3: The Hybrid Model
The hybrid approach is increasingly popular among mid-sized firms. Under this model, notary fees for client-related work are collected by the firm and either billed to the client or absorbed as overhead. Notary fees for non-client work—a walk-in requesting a notarization, or a personal favor for another employee—are retained by the notary.
This approach balances the firm’s legitimate interest in accounting for client-related costs with the notary’s personal ownership of their commission. It also aligns with the general consensus from notary authorities: fees earned during business hours on the employer’s behalf go to the employer, while fees earned outside that scope belong to the notary.
The key to making any hybrid model work is clarity. The policy must define exactly which notarizations are “client-related” and which are not, and there must be a mechanism for tracking both categories.
Billing Notary Fees to Clients: The Ethics Guardrails
If your firm bills notary fees to clients, you are entering a space governed by ABA Model Rule 1.5 and its state equivalents—the same rules that govern all law firm billing practices.
ABA Formal Opinion 93-379 established the foundational principle for billing in-house expenses: a lawyer may recover the direct cost of services performed in-house, plus a reasonable allocation of associated overhead, but may not add a surcharge that turns the expense into a profit center—unless the client has specifically agreed to the arrangement in advance.
Applied to notary fees, this means your firm can bill the client for the actual statutory notary fee incurred on their matter. You should not inflate the fee beyond what the notary is legally permitted to charge. And you should not bill a notary fee at all if no fee was actually charged—for instance, if your firm’s policy is to waive notary fees for clients as a courtesy.
The fee agreement or engagement letter should disclose that clients will be responsible for notary fees as part of case-related expenses. This is the same transparency requirement that applies to filing fees, courier costs, and any other expense you pass through to clients. Burying notary fees in a vague “miscellaneous expenses” line item is not a best practice—it is the kind of opacity that generates client complaints and, occasionally, ethics grievances.
The Liability Question Most Firms Overlook
Here is a dimension of the notary fee question that goes beyond dollars and cents: when a notary-employee performs a notarization as part of their job duties, the employer shares liability for any errors or misconduct.
According to the American Society of Notaries, if an employee-notary performs an improper notarization, the employer “could share liability” because the notarization was performed as a duty of the job. Multiple notary authorities go further, noting that both the notary and employer may be subject to full liability when the act occurs within the scope of employment.
This creates a strong argument for the “firm retains fees” approach—not because of the revenue, but because of the control it implies. If your firm is going to bear the liability for notarial acts performed on your watch, it makes sense for the firm to also maintain oversight of when, how, and for whom those acts are performed. A firm that says “keep the fees, it’s your commission” but also says “you must notarize whatever clients need” is accepting liability without maintaining control. That is an uncomfortable position.
The risk management solution is not just a fee policy—it is a comprehensive notary policy that covers who may perform notarizations, what identification the notary must verify, how the journal is maintained, and when to decline a request. Pair that with proper matter management so every notarization tied to a client matter is documented and traceable.
Building Your Firm’s Notary Fee Policy: A Practical Framework
A complete notary fee policy for a mid-sized law firm does not need to be complex, but it does need to address several specific questions:
Define the fee arrangement. State clearly whether notary fees collected during business hours are retained by the firm, retained by the employee, or split based on whether the notarization is client-related. Get the employee’s written acknowledgment.
Specify who pays for the commission. If the firm pays for the application, bond, stamp, training, and renewal, document it. While payment does not transfer ownership of the commission, it strengthens the firm’s position that business-hours notarizations are a compensated job duty.
Set fee amounts per jurisdiction. For each state where your firm operates, specify the notary fee amount that will be charged, at or below the statutory maximum.
Determine how fees are billed or recorded. If notary fees are billed to clients, they should appear as a line item tied to the specific matter. If they are absorbed as overhead, they should still be tracked for accurate financial reporting. If the employee keeps them, the firm should at minimum maintain a log for liability purposes.
Address non-client notarizations. Decide whether staff notaries may perform notarizations for walk-ins during business hours, and who retains those fees. Some states prohibit notaries from refusing to notarize for members of the public who present proper identification and pay the applicable fee.
Cover departure and transition. When a commissioned employee leaves, they take their commission, seal, and journal. Your policy should establish a process for transferring pending responsibilities to another commissioned staff member.
Tracking Notary Fees: Why It Matters More Than You Think
Whether your firm’s notary fee revenue amounts to $500 a year or $15,000, it needs to be tracked.
From a client billing perspective, notary fees passed through to clients must be documented and defensible. If a client disputes a $50 notary charge, your firm should be able to show exactly which documents were notarized, when, by whom, and at what per-act rate. That level of detail is table stakes for billing transparency.
From an accounting perspective, notary fees flowing to the firm are revenue that needs to be categorized and reported. Fees waived for clients represent absorbed overhead that should be visible in your analysis. And if employees keep the fees, the firm should still track notarization volume for workload and liability documentation.
The simplest approach: treat notary services like any other in-house expense. Create a dedicated category in your billing software, log each notarization against the appropriate matter, and include notary fees in your regular reporting cycle. If you already use legal billing software that integrates with your accounting system, adding a notary tracking workflow is straightforward.
The Bigger Picture: Small Fees, Big Principles
The notary fee question is, in one sense, about pocket change. But it touches on principles that run through every aspect of law firm financial management: transparency in client billing, clarity in employee compensation, consistency in expense categorization, and discipline in policy documentation.
Take an hour this quarter to draft a notary fee policy—or update the one you have. Talk to your commissioned staff about it. Make sure it is reflected in your fee agreements and your compensation tracking system. It is one of the easiest operational improvements you can make, and it pays dividends in clarity, compliance, and staff goodwill far beyond the dollar amount of the fees themselves.
Frequently Asked Questions
Can my law firm require a staff notary to turn over fees collected during business hours?
Yes, in most states. While the notary commission belongs to the individual, employers can generally require that notary fees collected during working hours as part of job duties be retained by the firm. The key is a written agreement between the employer and the employee. According to the American Association of Notaries, this type of arrangement is common and acceptable—but it must be applied uniformly and cannot extend to fees the notary earns on their own time outside of work.
What happens to the notary commission, seal, and journal when an employee leaves?
The notary takes everything with them. The commission, seal, and journal belong to the individual notary regardless of who paid for them. This has been confirmed by multiple state authorities, including the Texas Attorney General’s office (Opinion GA-0723). Your firm cannot retain these items. Plan for transitions by having multiple commissioned staff members so the firm is never dependent on a single notary.
Should we bill notary fees to clients or absorb them as overhead?
Either approach is permissible, but it must be disclosed and consistent. If you bill notary fees to clients, they should be listed as a specific line item on the invoice, charged at or below the statutory maximum, and referenced in the client’s fee agreement. Under ABA Formal Opinion 93-379, you may recover the actual cost of in-house services like notarization, but you may not add a surcharge that turns it into a hidden profit center. Many firms choose to waive notary fees for clients as a goodwill gesture and simply absorb the cost as part of general overhead.
Do notary fees need to be reported as income?
Yes—but with an important nuance. Notary fees are taxable income that must be reported on your federal return. However, under IRC Section 1402(c)(1), fees earned for services performed as a notary public are specifically exempt from self-employment tax. The IRS Schedule SE instructions direct notaries to enter “Exempt—Notary” and exclude notary income from their SE tax calculation. If the firm retains the fees, they are firm revenue and should be categorized accordingly in your accounting system. If the employee keeps the fees, they must report the income but will not owe self-employment tax on it. This exemption applies only to fees for notarial acts—not to other income a notary signing agent might earn for non-notarial services like document handling or courier work.
Are there states where employers cannot claim notary fees at all?
No state explicitly prohibits an employer from entering into an agreement with an employee-notary regarding fee retention during business hours. However, the structure of such agreements varies by jurisdiction. Some states, like Oregon, have explicit statutory provisions authorizing employer-employee fee agreements. Others are silent, meaning the arrangement defaults to contract and employment law principles. In all cases, a written agreement is the safest path. Check with your state’s secretary of state or commissioning authority for jurisdiction-specific guidance.
Sources:
- American Society of Notaries, “Employee Notary Issues”
- American Association of Notaries, “Who Dictates My Notary Duties—The State or My Employer?”
- American Association of Notaries, “Notarial Fees FAQ”
- National Notary Association, “2026 Notary Fees by State”
- National Notary Association, “Who Owns Your Notary Commission, Seal and Journal?”
- Oregon Revised Statutes, Chapter 194 — Uniform Law on Notarial Acts
- ABA Model Rules of Professional Conduct, Rule 1.5: Fees
- Texas Secretary of State, “Frequently Asked Questions for Notaries Public”
