The Difference Between Zakat and Nisab

Zakat vs. Nisab

Zakat is a religious obligation to all Muslims who meet the necessary criteria to donate a certain portion of money annually to charitable causes.  

However, Nisab is the dividing line, which divides whoever must or must not pay the Zakat. In other words, before being obligated to pay Zakat, Muslims must own a minimum range of wealth and possessions. Therefore, if the personal wealth is below the Nisab during one lunar year, no zakat is owed for that period. 

What is Zakat?

Zakat is a well-known Islamic finance term. It is regarded as a form of worship, and it is a mandatory process for Muslims. It is a certain proportion of wealth, which Muslims are obliged to donate every year. Generally, it is 2.5% to those Muslims who are eligible.

What is Nisab ?

Nisab is a certain wealth threshold, in which a Muslim has to be at, or above, to donate a portion of their wealth. Gold and silver are the two values used to calculate Nisab. It is the value of 87.48 grams of gold or 612.36 grams of silver.

How Zakat Works

The Islamic religion has Five Pillars;

• The declaration of Faith.
• The Prayer.
• Donating Zakat.
• Fasting Ramadan.
• The Hajj Pilgrimage.

Zakat is one of the Five Pillars; it’s an obligatory act for all Muslims. However, Sadaqah is a voluntary act of kindness or generosity. Don’t confuse these two!

Zakat is one of the Five Pillars, and it’s an obligatory act for all Muslims. Remember that Sadaqah is just a voluntary act of kindness or generosity. It is different from zakat. Don’t confuse these two together!

Religious texts offer comprehensive descriptions of the minimum amount of Zakat that should be distributed to those less fortunate. 

Generally, Zakat varies according to wealth source, whether the wealth came from;

• Business activities.
• Farm produce and cattle.
• Paper currency.
• Precious metals, such as; gold and silver. 

Zakat is paid out at the end of the lunar year, where the calculations on any leftover wealth are made. Zakat is based on the income of the person and the value of their possessions. The common minimum amount (Nisab) for those who are qualified is (2.5%) or (1/40) of a Muslim’s total savings and wealth. 

Types of Zakat

There are eight types of zakat; 

1. Zakat on gold and silver.
2. Zakat on metal.
3. Zakat on jewelry.
4. Zakat on cattle.
5. Zakat on trade.
6. Zakat on crops.
7. Zakat on fruits.
8. Zakat on ore.

Categories of Zakat

The law of zakat establishes the right of those in need to help and support;

1. The poor (Al-Fuqara’).
2. The needy (Al- Masakin).
3. The administrators.
4. Those whose hearts are to be reconciled; (new Muslims and the friends of the Muslim community).
5. Those in bondage (slaves and captives).
6. The debt-ridden.
7. In the cause of Allah.
8. The wayfarer; (who are stranded on traveling with few resources).

Conditions for Zakat

There are conditions for zakat, which are;

• Being an adult.
• Being a Muslim.
• Being sane.
• Has complete ownership.
• The wealth has reached the “Nisab.”
• Wealth has the ability to grow and increase.
• To pass a whole lunar year after possessing the Nisab.

There are some differences of opinion in three cases, whether zakat is to be paid or not. Such as;

1. The orphan.
2. The child (pre-puberty).
3. The mad person (insane).

In these three cases, the three schools of jurisprudence (other than the Hanafi school) state that; zakat should be paid, by their guardian, on qualifying wealth owned by the orphan, child, and the insane. 

Donate your Zakat

Zakat is one of the Five Pillars of Islam, and as our Prophet Muhammad (SAW) clarified for us; it is obligatory for every sane, adult Muslim who owns wealth over a certain amount of money, “Nisab,” to pay (2.5%) of that wealth as zakat. 

Zakat money is meant to help those in need, individuals or communities, to provide whatever support needed to give them a decent life, whether to donate zakat money to charities, humanitarian institutions, or relief organizations, to give aid in building and supplying schools for children and adults, food for the hungry, and shelter for those who are displaced.

It is the duty of every Muslim towards those in need in our society. 

How to Donate Zakat

Today, there are many ways to give out your Zakat. Whether through charities, humanitarian institutions, or relief organizations. Search the web and check which of those are actively working and making a clear effort, close to where you are or where you want your Zakat donation to be. 

Read More:

1. Zakat Donations Distribution
2. Zakat for Education

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