Is My Salary Halal Through an Umbrella Company?

Answered by Mawlana Ilyas Patel

Question

Is it permissible to receive my salary through an umbrella company, and are my earnings halal?

I work through an intermediary company that receives payment from the client and then pays me. I’m unsure if this setup is valid, especially if no interest is involved. Is this type of employment generally permissible?

Answer

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

I pray you are in good faith and health. Thank you for your question.

If your actual work is halal, and the umbrella company is just a payment structure with no interest or haram dealings, your earnings are halal, and the setup is permissible.

An umbrella company acts as an intermediary, employing contractors and handling their payroll, tax, and other administrative tasks while the contractor works for a client or agency. They’re just managing the administrative and payroll side for you.

The permissibility of income depends on the nature of the work itself. Your income will be considered halal as long as the work is permissible and you fulfill the required tasks. [Zayla‘i, Tabyin al-Haqa’iq]

Please go through the valuable answers and links below. Insha’Allah, they will provide you with guidance and direction.

Related: Provision and Work: A Reader

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I pray this helps with your question.
Wassalam,
[Mawlana] Ilyas Patel
Checked and Approved by Shaykh Faraz Rabbani

Mawlana Ilyas Patel has received a traditional education in various countries. He started his schooling in the UK and completed his hifz of the Quran in India. After that, he joined an Islamic seminary in the UK, where he studied secular and Aalimiyya sciences. Later, he traveled to Karachi, Pakistan, and other Middle Eastern countries to further his education. Mawlana has served as an Imam in the Republic of Ireland for several years and taught the Quran and other Islamic sciences to both children and adults. He also worked as a teacher and librarian at a local Islamic seminary in the UK for 12 years. Presently, he lives in the UK with his wife and is interested in books and gardening.