As one of the pillars of Islam, Zakat is an important obligation on all adult Muslims who possess the value of Nisab. However, many of us struggle with calculating Zakat and understanding all the components that make up this beautiful act of worship. That's why we've created this short step-by-step guide covering everything from who receives Zakat to why we give it in the first place and all the stuff in between!
Zakat is a duty on all adult Muslims of sound mind, if their wealth exceeds the value of Nisab (defined as 625g silver or 87.5g gold). Muslims who own wealth or assets equal to or above a certain financial threshold (the nisab) are required to donate 2.5% of their wealth to those in need.
Zakat is the third pillar of Islam and denotes the amount of wealth a Muslim must pay to certain groups of underprivileged people. Zakat itself is neither a tax nor a charity but instead a compulsory act of worship stipulated by Allah (swt). Zakat is intended to purify our wealth, not only physically, but also spiritually. It purifies our heart against selfishness as well as ensuring that society’s poorest are protected against hunger and destitution.
Zakat benefits not only those in need who receive Zakat but also those who have given their wealth for the sake of Allah (swt). By paying Zakat, we acknowledge that our wealth is in fact not our own, but a blessing to be shared.
To be eligible for Zakat payment you have to be Muslim, above the age of puberty and possess the amount of nisab. If all of the above apply, you have to pay 2.5% Zakat on all of your savings and other applicable assets. If you wish you can pay your Zakat in advance. Then you can adjust the sum accordingly at the end of your Zakat year when payment is due, although this is not an obligatory requirement. However, you must pay within the subsequent year or your Zakat will be overdue.
There are various groups of people who can receive Zakat. These groups are described by Allah (swt) in the Holy Qur’an (9:60). Zakat becomes obligatory once a full lunar year has passed, providing that your qualifying wealth has been held for one full year. Your Zakat year therefore starts on the date your wealth first equalled or exceeded the nisab and should be calculated on that date for each subsequent year.
Zakat al-Fitr (or Fitrana) is a duty paid on the occasion of the Eid of Ramadan which is required of every Muslim, whether male or female, minor or adult, as long as they have the means to pay. The head of the household may pay the required amount for the other members if preferred. Please consult your local mosque or contact us to confirm the recommended amount to pay per head each year.
Zakat is due on:
• Gold & silver (ornaments or jewellery) • Cash held at home or in bank accounts • Pensions • Property owned for investment purposes • Stocks & shares owned directly or through investment funds • Money lent to others • Business stock in trade & merchandise • Agricultural produce
Your Zakat donations with Muslim Hands provide life-saving and life-changing relief to thousands of people every year. Give to one of our many Zakat-eligible projects.
Our handy Zakat calculator makes working out how much you have to pay super easy.
By Tijen Horoz, Senior Communications Editor