Zakat Guide
Complete guide and instructions on paying Zakat
What is Zakat?
Zakat is obligatory for every adult Muslim whose wealth exceeds the Nisab threshold.
Zakat - One of the 5 Pillars of Islam
Zakat is a specific amount of wealth that a Muslim must pay to designated groups of underprivileged people. Zakat is neither a tax nor voluntary charity; rather, it is a mandatory act of worship ordained by Allah, representing the responsibility of the wealthy towards the poor.
Zakat - is mandatory
For it to be obligatory, a Muslim must be of age and their wealth must exceed the Nisab. The amount of Zakat is calculated based on the assets owned by the person.
Employee
Convenient for calculating income and other assets.
Entrepreneur / Businessman
Convenient for calculating organizational assets and other property.
Farmer / Livestock Owner
Convenient for calculating livestock and other agricultural assets.
Investor
Convenient for calculating profitable assets and other property.
Universal Complex
Convenient for calculating multiple streams of income and assets.
How much Zakat is paid?
Muslims whose wealth or assets meet or exceed a certain financial threshold (Nisab) are required to give 2.5% of their total wealth to those in need.
Nisab Amount
Nisab is set as the value of 595 grams of silver or 85 grams of gold.
Silver
595 grams of silver nisab amount
Gold
85 grams of gold nisab amount
What types of wealth are subject to Zakat?
Zakat is paid from the following types of assets:
- Gold and silver, including jewelry or items containing gold/silver
- Cash kept at home or in bank accounts
- Money lent to others
- Business inventory and stocks
- Shares owned directly or through investment funds
- Pensions
- Property held for investment purposes
- Agricultural products
- Livestock such as cows, goats, and sheep
Zakat - A Financial Act of Worship
Prayer is physical worship, Fasting is spiritual worship, and Zakat is financial worship. By giving Zakat, a person allocates a specific portion of their wealth to the rightful recipients in the cause of Allah, purifying the remaining portion.
Who receives Zakat?
The Poor
Faqir (The Poor)
The Needy
Miskin (Those in absolute need)
Zakat Collectors
Those employed to manage Zakat
To reconcile hearts
Those whose hearts are being reconciled to Islam
For freeing slaves
For the liberation of captives
In the Cause of Allah
Some scholars state this includes seekers of knowledge.
Those in Debt
People burdened by overwhelming debt
Wayfarers
Travelers stranded far from home and resources
When should Zakat be paid?
The Zakat year begins on the day a Muslim's wealth first reaches or exceeds the Nisab, and it must be paid annually on that same date.
Can Zakat be paid in advance?
Muslims can voluntarily pay Zakat in advance. Two conditions must be met: both the giver and the receiver must be eligible for Zakat at the time of payment.
Is missed Zakat still payable?
Anyone who has missed Zakat in previous years must pay the debt as soon as possible. Missed Zakat is calculated like the current year's, but the Nisab value is taken from the year the Zakat was missed.
