Zakat is the third of the five Pillars of Islam. It is an obligatory payment that is due from all Muslims whose personal wealth meets and/or exceeds the Nisab threshold.
Q. What is the meaning of zakat?
Zakat means to purify one’s wealth by making an obligatory donation to help those less fortunate. Zakat aims to create a balanced society where those in need do not have to go without.
Q. Who is eligible to pay zakat?
Adults who are of sound mind are eligible to pay Zakat as long as they meet the required Nisab threshold. In order to be eligible to pay Zakat, your level of expendable wealth must remain higher than the Nisab value for a full year. This is when your Zakat payment will be due.
Children are not expected to pay Zakat until they reach puberty. Before adulthood or the age of puberty, no Zakat is due even if the Nisab value has been reached for several years.
Nisab is the threshold for the amount of personal expendable wealth a Muslim can have before Zakat is due. This is based on the value of gold and silver.
Nisab values are set at the valuation of 87.48g of gold or 612.36g of silver. For example, if 1g of silver is valued at 38p, to work out the Nisab value would be 612.36 x 0.38 which equals 232.6968. That figure would then be rounded up to 232.70, making the Nisab value £232.70.
Zakat is due a year after your level of personal wealth has reached the Nisab threshold. In order to remain eligible to pay Zakat, your level of expendable wealth should remain higher than the Nisab for a full year.
For example, if your level of expendable wealth exceeds the total Nisab value in August, your payment will not be due until the following August so long as your personal wealth remains above the threshold.
Although Zakat can be paid at any point in the year, the Holy month of Ramadan is the most popular time to make payment as all blessings and rewards are multiplied during this month.
Hawl is a lunar year, often referred to as an Islamic year which is approximately 354 days. This is why the days of the Holy month of Ramadan rotate by 10 or 11 days every calendar year.
The value of Zakat is 2.5% of your personal expendable wealth. This means that if your expendable wealth comes to a value of £1,000, your Zakat payment would be £25.
Q. Can I Pay Zakat Monthly?
Zakat can be paid in monthly instalments. To do this, divide the total amount of Zakat owed by 12 and set up a regular gift with Muslim Hands specifying Zakat as the type of donation.
Q. Should I Include Any Loans and/or Mortgage?
When working out your expendable wealth do not include any finances relating to personal loans or mortgages. This is a debt owed by the individual and is, therefore, not to be classed as expendable income.
Q. How Can I Calculate How Much Zakat to Pay?
If you are struggling to work out the total of your expendable wealth and the value of Zakat that is owed, you can utilise Muslim Hands’ Zakat calculator to ensure that you pay the correct amount.
Our calculator allows you to input the total value of your gold and silver, any cash in your bank and any business assets that you may own, as well as taking into account any unpaid debts you may have.
Q. Where Does Zakat Money Go?
Muslim Hands has distributed more than £50 million worth of Zakat payments to those most in need over 20 years across more than 30 countries. There are eight main groups of people who are eligible to receive Zakat donations, which are:
- The poor
- Those in debt
- The wayfarer
- Those in the cause of Allah (SWT)
- The needy
- Those whose hearts are to be reconciled
- To free those in captivity
- Those who collect and distribute Zakat
Q. How Can I Pay My Zakat?
To pay your Zakat with Muslim Hands this year, click here.