ISIS cuts fighters’ salaries due to ‘exceptional circumstances’

Jessica Hartogs, special to CNBC
ISIS slashes fighters' salaries
ISIS slashes fighters' salaries

ISIS has allegedly cut its fighters' salaries by as much as 50 percent, according to newly-leaked internal documents from the jihadist group, which controls parts of Syria and Iraq.

The documents, obtained and translated by Aymenn Jawad Al-Tamimi, a research fellow at the Middle East Forum who studies the Islamic State, showed the salaries were halved at the end of last year.

"So on account of the exceptional circumstances the Islamic State is facing, it has been decided to reduce the salaries that are paid to all mujahideen by half, and it is not allowed for anyone to be exempted from this decision, whatever his position. Let it be known that work will continue to distribute provisions twice every month as usual," reads the document.

According to the Syrian Observatory for Human Rights, the cuts were directed primarily at fighters in the city of Al-Raqqa, the de facto base of the Islamic State.

The Observatory added on its website that the decision had apparently stirred feelings of resentment among the Syrian militants, who believe their salaries have been cut in order to increase foreign fighters' salaries, who are already paid double.

ISIS soldiers earn between $400 and $1,200 a month, plus a $50 stipend for their wives and $25 for each child, according to the Congressional Research Service.

Militant Islamist fighters parade on military vehicles along the streets of northern Raqqa province, June 30, 2014.
A new front in the war on ISIS: Cut off its cash
30,000 more reasons to worry about terrorism in 2016

The salary cuts mean Syrian ISIS fighters would see their salaries drop to about $200 a month, according to Observatory head Rami Abdel Rahman. Foreign fighters would have their monthly income reduced to $400, Abdel Rahman told AFP.

The Islamic State approved a $2 billion dollar budget for the year in early 2015, including a projected $250 million dollar surplus, designed to cover the costs of operations in both Iraq and Syria, according to the Congressional Research Service. However, it is difficult to know if the terrorist organization actually had the budget.

In addition to the cost of its military operations, ISIS also provides salaries, infrastructure, and social services including schools and hospitals.

The Islamic State has generated significant income through the use of kidnapping for ransom.

A 2014 United Nations report estimated that ISIS collected $35-$45 million in ransom fees in 2014 alone, with most of the victims being local residents, but also including a smaller number of foreign aid workers and journalists.

Reported ransom amounts varied last year. ISIS reportedly demanded a ransom of $100 million euros ($132.5 million USD) from the family of U.S. journalist James Foley, who was eventually killed, and requested the same amount from the families of two other American hostages.

Although the U.S. and the U.K. have thus far publicly refused to pay kidnap ransoms, France may have paid up to $18 million for four of its captured journalists in April 2014, and locals are said to be ransomed for anywhere between $500 and $200,000 each, reported the Congressional Research Service.

The intensified U.S.-led coalition airstrikes targeting oil infrastructures in Syria and Iraq will most likely have added financial pressure to the group, as well as the 12-year low in oil prices.

General Lloyd Austin, head of the U.S. Central Command, told CNN that it has deprived the group of "millions of dollars".

"Combined with all of the other strikes that we've done on Isil's gas and oil production and distribution capabilities and strikes against his economic infrastructure and the various sources of revenue, you can bet that Isis is feeling the strain on his checkbook," said Austin.

Follow CNBC International on Twitter and Facebook.