What Is the Ruling on Charging for Services by Percentages?

Question

An Opportunity popped up to work for a Tech Startup as an app developer. They transformed how charities process Sales, Claim Gift Aid & Plan Logistics. I’m worried about taking a job in which my wealth will be haram. Two things made me worried when reading about their services:

1. (EPOS – electronic point of sale system) We charge a transparent 0.25% of all revenue processed through your tills.
2. (GiftAid) We charge a simple 8.5% of the payment received from HMRC.

Here is the link to the organization, so you can check out who they are and what they offer, and also the tools they use like EPOS, etc.

Answer

In the Name of Allah, the Most Merciful and Compassionate.

The type of transaction is valid according to the conditions of sales and service transactions. There is an express agreement since the two parties agree on a price. The seller may charge any fee, based upon a method of his choice, even by percentage. In this case, the percentages charged appear to be in exchange for services rendered, and Allah knows best.

The Conditions of a Valid Sale

“Allah has made sale lawful (…)” [Quran 2:275]

The more reliable of the two positions reported from our Imam, Muhammad Ibn Idris Al-Shafi’i (Allah Most High be well pleased with him), is that this verse is general. The permissibility is made more exclusive by other evidence. The Prophet (Allah bless him and give him peace) forbade various sales but did not explain the permissible ones; his not doing so proves that the initial presumption for the validity of a sale is permissibility. This is also espoused by hadiths such as the one in which the Prophet (Allah bless him and give him peace) was asked what earning was best, and he answered, “The work of a man’s hand, and every pious sale.” [Hakim, Mustadrak]

Pious sales are free of cheating and deceit.

Lexically, “sale” means to transact something for something else. In Sacred Law, it means to exchange an article of property for other property in a particular way. Its integrals are six:

1. the seller; the
2. the buyer;
3. the price;
4. the article purchased;
5. the spoken offer;
6. and the spoken acceptance. [Keller, Reliance of the Traveller]

The Articles or Services Exchanged

Five conditions must exist in any article transacted. It must:

1. be pure (or in itself, or if affected with filth, it must be capable of being purified by washing);
2. be useful;
3. be deliverable (by the seller to the buyer, meaning that the buyer can take possession of it);
4. be the property of the seller or the person whom the seller has been authorized to represent;
5. and be determinately known (ma‘lum) (to the buyer and seller, as to which particular thing it is, how much it is, and what kind it is, to protect against chance or risk (gharar), because of the hadith related by Muslim that the Prophet (Allah bless him and give him peace) forbade the transaction of whatever involves chance or risk). [Nawawi, Minhaj al-Talibin]

I pray this is of benefit.
[Shaykh] Irshaad Sedick
Checked and Approved by Shaykh Faraz Rabbani

Shaykh Irshaad Sedick was raised in South Africa in a traditional Muslim family. He graduated from Dar al-Ulum al-Arabiyyah al-Islamiyyah in Strand, Western Cape, under the guidance of the late world-renowned scholar, Shaykh Taha Karaan. 

Shaykh Irshaad received Ijaza from many luminaries of the Islamic world, including Shaykh Taha Karaan, Mawlana Yusuf Karaan, and Mawlana Abdul Hafeez Makki, among others.

He is the author of the text “The Musnad of Ahmad ibn Hanbal: A Hujjah or not?” He has served as the Director of the Discover Islam Centre and Al Jeem Foundation. For the last five years till present, he has served as the Khatib of Masjid Ar-Rashideen, Mowbray, Cape Town.

Shaykh Irshaad has thirteen years of teaching experience at some of the leading Islamic institutes in Cape Town). He is currently building an Islamic online learning and media platform called ‘Isnad Academy’ and has completed his Master’s degree in the study of Islam at the University of Johannesburg. He has a keen interest in healthy living and fitness.