Fatwa ID: 07667
Answered by Alimah Shireen Mangera-Badat
Question:
Is it permissible to work on cash here?
As the situation of the job market is bad and the inflation is at its peak, being an international student, it is difficult to survive here with a family. Especially if you are the sole earner of the family.
I have Allhamdulillah got a temporary job on SIN (taxes are deducted from the salary).
I have been given an offer from a relative who is setting up his business and wants me to help him with setting up his shop and configuring the products for him. He is willing to pay me cash.
Is it permissible to work on cash and pay the tax for the money earned from cash-based jobs?
What does Islam say in this matter? What is recommended regarding this matter?
In the name of Allah, the Most Gracious, the Most Merciful
Answer:
Permissibility of Cash Payments: In Hanafi Fiqh, the way you receive your payment—whether in cash or through other means—does not inherently affect the permissibility of the work itself, if the work is halal (permissible), and the payment is for a lawful service or product.
The general rule in Islamic jurisprudence is that earnings are permissible if the work itself is permissible and the agreed-upon terms are fulfilled by both parties. There is no distinction made between cash payments and other forms of payment in classical texts like Al-Hidayah by Al-Marghinani, which discusses the conditions of valid transactions (buying, selling, and contracting services).1
- Tax Obligations:
Honouring Legal Obligations: Islam places a strong emphasis on fulfilling agreements and obligations, including those related to the laws of the country you reside in. If the law of the land requires that you report your income and pay taxes on it, then it is obligatory for you to comply with these laws.
This is part of the general Islamic principle of upholding contracts and obligations, the Quran has stipulated in Surah Maida:1 “O believers, complete your contract (fulfil your commitments….), This includes fulfilling legal obligations like paying taxes, as these are part of the social contract and agreements you have entered by living and working in a particular country. Not reporting income or avoiding taxes that are legally required would go against this principle.
- Ethical Considerations:
Transparency and Integrity: In Islam, transparency and honesty in financial dealings are highly emphasized. Working for cash is permissible, but it should be done in a manner that does not involve deceit or dishonesty, especially in relation to fulfilling legal and financial obligations like paying taxes.
Imam Abu Hanifa (rahimahullah) and his students placed great emphasis on ethical conduct in business dealings, ensuring that transactions are free from deceit and that all obligations, including those towards the state, are met. This is part of the broader Islamic principle of avoiding fraud and ensuring fairness in all dealings.
In conclusion, It is permissible to work and receive payment in cash if the work is halal, and the payment is for lawful services or products.
You should report your cash earnings and fulfill any tax obligations according to the laws of the country you are residing in. This is in line with the Islamic principles of fulfilling contracts and legal obligations.
Transparency and honesty in your financial dealings are essential, and it is recommended to ensure that all earnings, including cash payments, are handled in a way that is compliant with both Islamic teachings and the legal requirements of the country.
I hope that this answers the question.
Only Allah knows best.
Written by Alimah Shireen Mangera-Badat
Checked and approved by Mufti Mohammed Tosir Miah
Darul Ifta Birmingham
في كتاب الهداية: “الأصل في المعاملات الإباحة حتى يقوم دليل على التحريم” (الهداية، كتاب البيوع).
2 في كتاب رد المحتار: “الصدق والأمانة في المعاملات من أعظم القربات إلى الله، ويجب الالتزام بالقوانين المعمول بها ما لم تخالف الشرع” (رد
المحتار، كتاب البيوع).
