Canadian Halal Investor.

NASDAQ Shariah screener · October 2026

Is Automatic Data Processing, Inc. (ADP) Halal?

FAIL

Automatic Data Processing, Inc. · NASDAQ: ADP · Industrials

The short answer

No - Automatic Data Processing, Inc. (ADP) fails this Shariah stock screen at the interest-income gate under the strict AAOIFI-consistent reading. ADP, the Roseland-based payroll and HR outsourcing company, has a clean business (debt of $4,964.1M is only 4.82% of its ~$102.92B market cap). But ADP holds client payroll/tax funds before remittance, invests them, and keeps the interest - 'Interest on funds held for clients' of $1,354.8M is about 6.17% of FY2026 total revenues ($21,947.4M), above the 5% ceiling. Honest disclosure: third-party views diverge - Zoya's proprietary methodology excludes client-funds interest and reports $375.6M (1.71%), while Musaffa marks ADP 'Not Halal' - consistent with counting the client-fund interest. This is a factual screen, not a religious ruling - consult a qualified scholar for personal rulings.

Gate 1 — Business activity: PASS

Automatic Data Processing, Inc. (NASDAQ: ADP), founded in 1949 and headquartered in Roseland, New Jersey (ISIN US0530151036), provides cloud-based human capital management. Per its FY2026 10-K (year ended June 30, 2026; filed ~August 5-6, 2026; audit opinion dated August 5, 2026, Deloitte & Touche, Morristown NJ), its segments are Employer Services (payroll processing/tax filing, HR, talent, time & attendance, benefits administration, compliance, retirement services) and PEO Services (employment administration outsourcing for SMBs; 762,000 average worksite employees in Q3 FY2026). Scale: 1.1M+ clients, 42M+ workers paid, 140+ countries/territories, $3.5 trillion moved in FY2026. Business-screen implication (factual): payroll/HR outsourcing - no alcohol, tobacco, gambling, weapons, adult entertainment, pork, or conventional banking/insurance as a core activity. The consideration: ADP holds client payroll/tax funds before remittance, invests them, and keeps the interest - reported as a top-line revenue item, 'Interest on funds held for clients' of $1,354.8M in FY2026 (MD&A: average client funds balances of $40.4B, +7.4% YoY). This is the sole material non-compliant income source, carried into the interest gate below. Gate 1 passes. Facts only.

Gate 2 — Debt and cash: PASS

Per ADP's FY2026 10-K (year ended June 30, 2026; filed ~August 5-6, 2026; $ millions), long-term debt at June 30, 2026 was $4,964.1M (vs $3,974.7M at June 30, 2025; the increase = a new $1B senior note due 2036 issued in FY2026 - now $5.0B notes maturing 2028/2030/2032/2034/2036); commercial paper outstanding was $0 (was $4,769.5M at June 30, 2025, repaid early July 2025; program capacity $11.7B). Corporate debt total = about $4,965M (client funds obligations of $44,415.5M are client money, NOT corporate debt - excluded). Against a market cap of about $102.92B ($263.96 per share, Finnhub, October 2, 2026; sanity check: 397.8M shares outstanding x $263.96 = $105.0B - consistent), debt / market cap is about 4.82% - below the ~33% ceiling. Corporate cash and cash equivalents of $4,230.1M is about 4.11% of market cap. Gate 2 passes. Facts only.

Gate 3 — Non-compliant income: FAIL

Per ADP's FY2026 10-K ($ millions), 'Interest on funds held for clients' was $1,354.8M (the 10-K's Consolidated Statements of Earnings; MD&A notes average client funds balances of $40.4B, +7.4% YoY) against Total revenues of $21,947.4M (= $13,476.8M other revenues + $1,354.8M client-fund interest + $7,115.8M PEO revenues, net of $81,123.2M passthrough payroll costs) = about 6.17% of revenue - above the 5% non-compliant income ceiling. ADP holds client payroll/tax funds before remittance, invests them, and keeps the interest - interest income earned and retained by the company. Divergence disclosed: Zoya's proprietary methodology excludes client-funds interest and reports ADP's interest income as $375.6M (1.71%); Musaffa marks ADP 'Not Halal' (April 2026) - consistent with counting the client-fund interest. Interest expense was $459.3M. Gate 3 fails under the strict AAOIFI-consistent reading. Facts only.

Key figures used

Frequently asked questions

What does ADP do?

Automatic Data Processing, Inc. (NASDAQ: ADP), founded in 1949 and headquartered in Roseland, New Jersey (ISIN US0530151036), provides cloud-based human capital management. Per its FY2026 10-K (year ended June 30, 2026; filed ~August 5-6, 2026; audit opinion dated August 5, 2026, Deloitte & Touche, Morristown NJ), its segments are Employer Services (payroll processing/tax filing, HR, talent, time & attendance, benefits administration, compliance, retirement services) and PEO Services (employment administration outsourcing for SMBs; 762,000 average worksite employees in Q3 FY2026). Scale: 1.1M+ clients, 42M+ workers paid, 140+ countries/territories, $3.5 trillion moved in FY2026. Its common stock trades on the NASDAQ Global Select Market (ticker ADP). In FY2026 it reported total revenues of $21,947.4M.

Why does ADP fail this Shariah stock screen?

ADP fails this Shariah screener at the interest-income gate under the strict AAOIFI-consistent reading. Gate 1 (business activity): payroll/HR outsourcing - no alcohol, tobacco, gambling, weapons, adult entertainment, pork, or conventional banking/insurance as a core activity - clean. Gate 2 (debt): corporate debt of $4,964.1M is about 4.82% of its ~$102.92B market cap (October 2, 2026), below the ~33% ceiling - PASS (client funds obligations of $44,415.5M are client money, not corporate debt). Gate 3 (non-compliant income): 'Interest on funds held for clients' of $1,354.8M is about 6.17% of FY2026 total revenues ($21,947.4M), above the 5% ceiling - FAIL. ADP holds client payroll/tax funds before remittance, invests them, and keeps the interest - interest income earned and retained by the company. Result: FAIL. Honest disclosure: third-party views diverge - Zoya's proprietary methodology excludes client-funds interest and reports ADP's interest income as $375.6M (1.71%), while Musaffa marks ADP 'Not Halal' (April 2026) - consistent with counting the client-fund interest. Both positions are reported. This is a factual screen, not a religious ruling - consult a qualified scholar for personal rulings.

What is ADP's interest-bearing debt ratio?

Per ADP's FY2026 10-K (year ended June 30, 2026; filed ~August 5-6, 2026; $ millions), long-term debt at June 30, 2026 was $4,964.1M (vs $3,974.7M at June 30, 2025; the increase = a new $1B senior note due 2036 issued in FY2026 - now $5.0B notes maturing 2028/2030/2032/2034/2036); commercial paper outstanding was $0 (was $4,769.5M at June 30, 2025, repaid early July 2025; program capacity $11.7B). Corporate debt total = about $4,965M (client funds obligations of $44,415.5M are client money, NOT corporate debt - excluded). Against a market cap of about $102.92B ($263.96 per share, Finnhub, October 2, 2026; sanity check: 397.8M shares outstanding x $263.96 = $105.0B - consistent), debt / market cap is about 4.82% - below the ~33% ceiling. Corporate cash and cash equivalents of $4,230.1M is about 4.11% of market cap. Gate 2 passes. Facts only.

How much interest income does ADP earn?

Per ADP's FY2026 10-K ($ millions), 'Interest on funds held for clients' was $1,354.8M (the 10-K's Consolidated Statements of Earnings; MD&A notes average client funds balances of $40.4B, +7.4% YoY) against Total revenues of $21,947.4M (= $13,476.8M other revenues + $1,354.8M client-fund interest + $7,115.8M PEO revenues, net of $81,123.2M passthrough payroll costs) = about 6.17% of revenue - above the 5% non-compliant income ceiling. ADP holds client payroll/tax funds before remittance, invests them, and keeps the interest - interest income earned and retained by the company. Divergence disclosed: Zoya excludes client-funds interest and reports $375.6M (1.71%); Musaffa marks ADP 'Not Halal' - consistent with counting it. Interest expense was $459.3M. Gate 3 fails under the strict reading. Facts only.

Do Zoya, Musaffa, or ShariaPortfolio cover ADP?

Zoya covers ADP at zoya.finance/stocks/adp, reporting FY2026 revenue of $21,947,500,000 and interest income of $375,600,000 (1.71%) - its proprietary methodology excludes client-funds interest; its page FAQ text is garbled/contradictory, so no clean Zoya PASS/FAIL can be quoted. Musaffa covers ADP - marks it 'Not Halal' in its Nasdaq halal-stocks list (academy.musaffa.com/list-of-halal-stocks-in-nasdaq-100/, April 2026) - consistent with counting the client-fund interest. ShariaPortfolio: no public per-stock ADP rating page was found - honestly reported as no coverage found, not invented.

Sources

Screened 2026-10-02 from published company figures and market data. Figures change; this page is educational, not financial advice and not a religious ruling.

Screened with our two-gate Shariah screening methodology (business-activity gate, then AAOIFI-style financial ratios).