Contemporary scholars, such as Dar al-Ifta’ al-Urduniyyah and Dar al-Ifta al-Misriyyah, have addressed similar questions. In summary, earning commission is generally permissible (halal) in Islam, provided it is structured according to valid Shariah contracts and follows ethical guidelines.
From a fiqh perspective, commission typically falls under recognised contracts such as bay‘ al-simsārah (brokerage), wakālah bi al-ujrah (agency with fee), or ju‘ālah (reward-based contract). Brokerage refers to facilitating a transaction between a buyer and seller, and classical scholars permit the fee as it is a lawful compensation for effort and service.
This permissibility is affirmed by contemporary fatwas. Dar al-Ifta’ al-Urduniyyah explains that a broker’s income is treated as ju‘ālah (a reward for successful effort), given the time, cost, and expertise involved. It also emphasises that the agreement should be made upfront and clearly understood between the parties. Likewise, Dar al-Ifta al-Misriyyah states that brokerage is permissible as it facilitates lawful trade, based on the hadith: “Muslims are bound by their conditions” (reported in Sahih al-Bukhari), as long as it is free from deception (tadlīs) and excessive uncertainty (gharar).
Regarding percentage-based commissions, while classical discussions noted potential concerns of uncertainty, contemporary standards such as those by Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) allow compensation to be structured as a percentage of the outcome, provided it is clearly agreed upon. Hence, modern commission structures are generally acceptable. It states in SS (34) Hiring of Persons “5/2/6 The pay can be determined as a percentage of the output (e.g.,10%) or a part of the thing to be made.”
However, several Shariah and ethical guardrails must be observed. The commission must be derived from halal products or services, as Islam prohibits assisting in sinful activities (Qur’an 5:2). The terms must be clear and transparent to avoid disputes or hidden elements. Honesty must be maintained by avoiding misleading practices, undisclosed commissions, or unjustified price inflation. Additionally, agents should avoid conflicts of interest and act fairly in the best interest of all parties.
In conclusion, earning commission is permissible when it is based on recognised Shariah contracts, supported by both classical scholarship and contemporary fatwas, and conducted in a transparent and ethical manner.
And Allah knows best.
Reference:
– https://aliftaa.jo/research-fatwas/879
– https://dar-alifta.org/ar/fatwa/details/11780/%D8%A7%D9%84%D8%B9%D9%85%D9%84-%D8%A8%D8%A7%D9%84%D8%B3%D9%85%D8%B3%D8%B1%D8%A9
