Can I Join an Employee Savings Plan for Bonuses If Profits Are Given to Charity?

Answered by Shaykh Abdul-Rahim Reasat

Question

Is it permissible to join an employee savings plan for employer bonuses if the funds have some exposure to conventional banks, and any profits from impermissible sources are donated?

Answer

I pray you are well.

Yes, in this situation, it is permissible.

Reviewing Where the Funds Are Invested

With many of these schemes, the employer or the bank invests the pooled funds into multiple avenues. You should find out where the money is being invested. You may ask those who run the scheme for this information.

If any profit has been accrued through impermissible investments, then that portion must be removed. You should calculate the percentage of profit generated from non-Shari‘a-compliant sources and dispose of that amount.

This is similar to general investments. Any impermissible income generated from sources not approved by Shari‘a must be removed.

As long as this is done, joining such a savings scheme is generally permissible.

Avoiding Riba

At the same time, the general rule is to avoid riba as much as possible.

Regarding riba, Allah Most High says:

“Be apprised of a declaration of war from Allah and His Messenger.” [Quran, 2:279]

Riba brings difficulty into a person’s life. People often focus on short-term benefits and say that everyone does it. However, the consequences may affect one’s life in ways that are not immediately apparent.

The jurists say:

“Repelling harm is given precedence over bringing benefit.”

One should not expose oneself to harm for the sake of a perceived gain. It is not worth bringing difficulty into one’s life.

[Shaykh] Abdul-Rahim
Checked and Approved by Shaykh Faraz Rabbani

Shaykh Abdul-Rahim Reasat began studying Arabic Grammar and Morphology whilst studying for a degree in English and History. After graduating, He traveled to Damascus and studied Arabic, Hanafi Fiqh, Usul al-Fiqh, Theology, and Logic with Shaykh Adnan Darwish, Shaykh ‘Abd al-Rahman Arjan al-Binsawi, Shaykh Husayn Darwish, Shaykh Muhammad Darwish, the late Shaykh Rashad Shams, and others. He then moved to Amman to continue his studies in those fields, as well as in Tafsir, Quranic Sciences, Hadith Methodology and Commentary, Prophetic Biography, Prophetic Perfections and Traits, Rhetoric, Arabic Literature, and Tajwid. His teachers include Shaykh Ali Hani, Dr. Hamza al-Bakri, Dr. Salah Abu al-Hajj, Dr. Mansur Abu Zina, Shaykh Ahmad Hasanat, Shaykh Ahmad Jammal, and others.