Is It Permissible to Receive Money for Washing the Dead?
Question

An Imam asked the widow to pay 5 hundred dollars for having someone wash and prepare the body of her husband. Is this legal and proper?
Praise be to Allah.Washing the Dead as an Act of Worship
Washing a Muslim who has died is an act of worship that Allah has enjoined on the Muslims, so it should be done with the aim of seeking reward and seeking the pleasure of Allah.
Accepting Unstipulated Payments for Washing the Deceased
If the family of the deceased gives the one who washes the dead body some money without him stipulating that, there is nothing wrong with him accepting it.
The Permissibility of Stipulating Payment for Washing the Dead
But if the person who washes the dead stipulates that he will not wash the deceased unless he is paid a certain amount of money, that is permissible but it will detract from his reward with Allah.
Scholarly Opinions on Receiving Compensation for Burial Services
It says in Kashshaf Al-Qina` (2/86):
It is disliked to take payment for washing, shrouding, carrying and burying the deceased. It says in Al-Mubdi`: Ahmad regarded it as disliked for the one who washes the deceased or digs the grave to receive payment for his work unless he is in need, in which case he may be given from the Bayt Al-Mal. If that is not possible he may be paid according to his work. (End quote)
Shaykh Ibn `Uthaymin (may Allah have mercy on him) was asked: Is it permissible to take payment in return for washing and shrouding the dead?
He replied:
If this payment or gift is given without being stipulated, there is no doubt that it is permissible and there is nothing wrong with that, because it is given to the one who washed and shrouded the deceased person in return for his work. The Prophet (blessings and peace of Allah be upon him) said “Whoever does you a favour, reciprocate.”
But if this payment is stipulated, then undoubtedly it detracts from the reward of the one who washes and shrouds the deceased, because the one who washes and shrouds the deceased attains a great reward, as washing and shrouding the dead is a communal obligation; so the one who washes and shrouds the dead attains the reward of a communal obligation. But if he takes payment for that, then his reward will be diminished.
But there is nothing wrong with him taking payment for that, because this payment is in return for work done for another, and in the case of such work it is permissible to accept payment for it, just as it is permissible to accept payment for teaching Qur’an, according to the correct view. (End quote from Fatawa Nur `ala Ad-Darb, 7/36)
The scholars of the Standing Committee for Issuing Fatwas were asked: What is the ruling on receiving payment for washing the dead, whether that payment was stipulated or not?
They replied:
It is permissible, but it is better to do it voluntarily if possible. And Allah is the source of strength; may Allah send blessings and peace upon our Prophet Muhammad and his family and Companions. (End quote from Fatawa Al-Lajnah Ad-Da’imah, 15/112- Shaykh `Abd Al-`Aziz ibn `Abdullah ibn Baz, Shaykh `Abd Ar-Razzaq `Afifi, Shaykh `Abdullah ibn Ghadyan, Shaykh `Abdullah ibn Qa`ud)
The payment that is stipulated by the one who washes the dead should be commensurate with his work, without any exaggeration or taking advantage.
For more details, please see the following answers: 44039, 155045, 146364, 11361.
And Allah knows best.