ZAKAT is a charitable donation that Muslims give to help the poor and needy.
In this section, we will discuss the meaning of ZAKAT, how much it costs and how it is distributed.
In Islam, ZAKAT is a charitable donation that Muslims give to help the poor and needy. It is one of the five pillars of Islam. The word “Zakat” means “purification.” It purifies one’s wealth by taking a percentage (2.5% for most Zakat-payers) and using it to help those in need.
Every year, Muslims are required to pay 2.5% of their total income or wealth as Zakat on the day they calculate their annual income or assets .
How to work out how much zakat to pay?
Zakat is a type of Islamic tax that is required to be paid by Muslims who are wealthy. It is a fixed amount and the amount depends on the wealth of the person.
Zakat comes in two types – zakat al fitr (the obligatory tax) and zakat al mal (the discretionary tax). The former has to be paid after Ramadan, while the latter can be paid anytime during the year.
The amount of zakat you have to pay depends on how much wealth you have – if you own 10 items worth more than $1,000, then you have to pay 1/10th of your wealth as zakat.
What Is Zakat Money
Giving back to humanity is the third Pillar of Islam. Charity is a fundamental teaching of Islam. Generosity is a central theme In Islam that Allah (SWT) gives to those He loves, and He guides us to refrain from attachment to material wealth.
Zakat purifies the wealth of Muslims, as Allah (SWT) says in the Qur’an;
“It keeps one away from sin and saves the giver from the moral ill arising from the greed and love of wealth”.
What is Zakat Money?
Paying Zakat is an act of worship. It is a fundamental part of being a Muslim. Muslims purify their money and assets by giving zakat money to their less-fortunate brothers and sisters in Islam (the poor and needy people) to get closer to Allah, The Most Merciful. He (SWT) made Zakat the Third Pillar of the Five Pillars in Islam.
When Zakat is Due?
Zakat is an obligatory annual payment Muslims must pay at the end of every lunar year. Ramadan is the best time to pay it. Muslims whose wealth has reached “Nisab,” which is the minimum threshold required for an individual to be eligible to pay Zakat in that specific lunar year, need to pay Zakat money to purify their overall wealth.
Who is Obligated to Give Zakat?
Zakat is the Third Pillar of Islam. Allah (SWT) made it an obligatory annual payment in the financial law of Islam. Muslims are one big family, which by nature, care for, support, and help each other. Being merciful and a giver is what defines a Muslim.
Nevertheless, there are conditions you must have to be obligated to pay Zakat;
- Being an adult, sane Muslim.
- A Muslim has total ownership of the wealth.
- The accumulated wealth over the lunar year must reach or exceed the “Nisab.”
Paying Zakat purifies and increases your wealth, as our Beloved Prophet Muhammad (SAW) said:
“Charity never diminishes wealth.”
Conditions that must be met by the Zakat money
Not all money is eligible for Zakat Money. Some conditions must be met to accept the money as Zakat money, such as;
- The Zakat money must be pure and Halal.
- The Zakat money must not be included in any type of trade.
- The wealth must reach or exceed the “Nisab”.
- To pass a whole Lunar year after possessing the Nisab.
- Wealth has the ability to grow and increase.
Funds for Which Zakat is Due
There are a set of funds where Zakat must be due. Here they are;
- A fixed overall wealth for a complete Lunar year.
- The wealth must exceed the “Nisab.”
- Zakat must be paid for gold and silver, estimated as; (85 gr for gold) and (595 gr for silver). An equivalent to 2.5% of the money.
- Hoarding gold and silver, or any other similar precious metals, Zakat is due.
- Buying a car with the intention of trade or investment, Zakat is due.
- Zakat is due on livestock. Cows must exceed two years of age and give a cow out of 30 cows. Sheep must exceed five years of age and give a sheep out of 40 sheep.
- Zakat is due on plants. It is paid for trees and crops.
How to Calculate Zakat?
Zakat is calculated as 2.5% of your surplus wealth, savings, and financial assets that you don’t use. Or you can calculate your Zakat due to our site in Bonyan, which is created to help you calculate gold, silver, cash, and other assets. It enables you to find out how much Zakat you need to pay.
Zakat on Money Saved
Zakat is obligatory on saved money, regardless of where it is saved. Accumulated capital has a growing value; therefore, Zakat is due. A percentage of 2.5% of that overall saved money must be donated to Zakat.
Zakat on Money That Does Not Grow
Zakat is due on the money, growing and not growing money. However, the money that does not grow, Zakat is only obligatory on it if the cash exceeds the Nisab for that particular Lunar year.
How to Calculate Zakat on Money Deposited in The Banks
Zakat is obligatory on saved money; however, kept money can be deposited in Islamic banks or banks that deal with interest and usury.
- If the money was deposited in Islamic banks, Zakat must be paid on the capital money and the profit.
- If the money was deposited in banks dealing with interest and usury, Zakat is due only on the capital money. There is no zakat on interest, as it is considered impure money.
Zakat on Gold and Silver
The Islam Law considers gold and silver as growing wealth in all their forms, a property that increases, which is the definition of Zakat. Therefore, a Muslim who possesses them at the threshold (Nisab) must pay their estimated Zakat for the whole Lunar year.
Nevertheless, keeping in mind that women don’t pay Zakat for the jewelry they use for ornamentation. Also, a plain silver ring for men, a silver decorative sword hilt, has no Zakat to pay.
How to Pay Zakat
Donating your Zakat money starts with where and to whom you would like to send your Zakat donations, do your research on Islamic centers and organizations and reach out to them. They will help you deliver your Zakat money to the most in need, whether they are located in your country or elsewhere.
To Whom Zakat is Given and Its Expenditures
The Islamic Law has mentioned to whom Zakat money must go to. Allah (SWT) told us that Zakat money is given to those 8 categories of people to help and support;
- The poor (Al-Fuqara’).
- The needy (Al- Masakin).
- The administrators.
- Those whose hearts are to be reconciled; (new Muslims and the friends of the Muslim community).
- Those in bondage (slaves and captives).
- The debt-ridden.
- In the cause of Allah.
- The wayfarer; (who are stranded on traveling with few resources).
Pay Zakat Online
Today, all Islamic Organizations and Centers globally provide safe online payments to their Donating Muslim Brothers and sisters. You can calculate your Zakat and safely donate your Zakat through these payment methods. Be at ease; your donation will find its way to your less-fortunate brothers and sisters somewhere in the world.
Zakat donation today is easier than ever before. All you need to do is calculate your Zakat money, decide where to send the money, whom you would like to receive it, and through which organization you would prefer to send it.
Many Islamic organizations can help you decide on all this, like Bonyan Organization, which will walk you through all these details, respond to your wishes, and help you make the best decision.