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Interest on funds


Bismillahir Rahmanir Rahim
As salamu Alaikum
I am working in a Company. In my company, there is a rule to give the share of Annual profit (5% of total) to the employees. But from the profit share, company hands over a certain portion to the employees and the company invests the rest amount (27%) at the bank. Each year, the company only distributes the interest of the investment to the employees. If the employee successfully completes his job (without any misdeeds or misconduct etc that causes his firing from the company), only then the company hands over him the rest 27% profit share money(of all the years accumulately). Otherwise, he is deprived of this money due to his misconduct etc. My question is : The Bank interest that is distributed by the company (which is beyond the employee’s control and may be said a gift from the company) is HALAL or HARAM for the employee?


In the Name of Allah, the Most Gracious, the Most Merciful.

As-salāmu ‘alaykum wa-rahmatullāhi wa-barakātuh.

If it was specified in the contractual document that the company will invest the said amount in the bank and the employee consented by signing the document, then the amount received yearly as interest is impermissible. This is so because the company is investing the money on the employee’s behalf due to his consent.

However, if the employee did not consent at all to the company investing the amount in the bank, then the amount received yearly is permissible. Such money will be considered a gift from the company and not interest.

And Allah Ta’āla Knows Best

(Mufti) Abdul Azeem bin Abdur Rahman





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