Currency Decimal Places & Minor Units Explained

Understanding Currency Minor Units

In ISO 4217, each currency specifies the number of minor units (decimal places) used in everyday transactions. This seemingly simple property is the source of many bugs in financial software.

Decimal Places by Currency

0 decimal places (no subunits):

• JPY (Japanese Yen) — smallest unit is 1 yen
• KRW (South Korean Won) — smallest unit is 1 won
• VND (Vietnamese Dong) — smallest unit is 1 dong
• CLP (Chilean Peso) — smallest unit is 1 peso
• ISK (Icelandic Krona) — subunits not in circulation

2 decimal places (most common):

• USD — 100 cents = 1 dollar
• EUR — 100 cents = 1 euro
• GBP — 100 pence = 1 pound
• CNY — 100 fen = 1 yuan (10 jiao = 1 yuan)

3 decimal places:

• KWD (Kuwaiti Dinar) — 1000 fils = 1 dinar
• BHD (Bahraini Dinar) — 1000 fils = 1 dinar
• OMR (Omani Rial) — 1000 baisa = 1 rial
• TND (Tunisian Dinar) — 1000 millimes = 1 dinar
• JOD (Jordanian Dinar) — 1000 fils = 1 dinar
• IQD (Iraqi Dinar) — 1000 fils = 1 dinar
• LYD (Libyan Dinar) — 1000 dirhams = 1 dinar

Why This Matters in Code

// WRONG: Assuming all currencies have 2 decimal places
function toMinorUnits(amount, currency) {
  return Math.round(amount * 100); // BROKEN for JPY, KWD
}

// CORRECT: Using currency-specific decimal places
const MINOR_UNITS = { USD: 2, EUR: 2, JPY: 0, KWD: 3, BHD: 3 };

function toMinorUnits(amount, currency) {
  const decimals = MINOR_UNITS[currency] ?? 2;
  return Math.round(amount * Math.pow(10, decimals));
}

Common Pitfalls

1. Assuming 2 decimals: The #1 bug. Always look up the minor unit for each currency.
2. Floating-point arithmetic: 0.1 + 0.2 !== 0.3 in JavaScript. Use integers (minor units) or a decimal library.
3. Rounding rules: Some currencies round to the nearest 0.05 (CHF), 0.50 (HUF), or 10 (KRW in practice).
4. Display vs. storage: Store in minor units (integers), display with appropriate formatting.