Answers to frequently asked questions about zakat
(Please note that if you have any specific questions, it is recommended that you contact your local imam)
Nissab
Nisab calculated using the silver standard is much lower than its gold equivalent. This is due to the fact that the value of silver has fallen sharply since the time of the Prophet (peace be upon him). There are arguments in favor of using both values of nisab - many scholars argue that it is better to use silver nisab, as it will increase the amount of charity distributed, while others argue that gold nisab is closer to the nisab used during the time of the Blessed Prophet (peace be upon him). However, if your assets consist entirely of gold, you must use gold nisab and similarly, if they consist entirely of silver, you must use silver nisab. Gold and silver: Any gold or silver owned is subject to zakat, including jewellery according to the Hanafi school, as these two metals have an intrinsic monetary value. Other precious metals and stones are not subject to zakat unless acquired for commercial purposes. Cash or cash equivalent: Cash at home, in bank accounts, savings, money lent to others, savings certificates, bonds, shares, investment certificates, etc. are taken into account when calculating zakat. Goods purchased for commercial purposes: Any goods purchased with the intention of selling are included in the property subject to zakat. With the exception of gold and silver, zakat is not due on personal items such as a house, car or other goods that were not purchased for commercial purposes. I have more money than the nisab, but I need it to cover my living expenses. If a person has assets above the nisab threshold, but needs to pay rent, buy food, clothing, etc. for himself and his dependents, then these costs can be deducted from his assets. If, after deducting these costs, the remaining amount is less than nisab, then there is no obligation to pay zakat. The zakat year begins on the day you first came into possession of assets in excess of nisab. This will be your starting date, whenever it comes, you will have to calculate zakat, regardless of fluctuations in the amount of property you own. The only situation in which the start date will change is if you become completely bankrupt and lose all your assets. In such a situation, the new seeding date will begin when you are again in possession of assets above nisab. If you are unsure of your semen date, estimate it as best you can. As long as you have assets above the nisab threshold at the beginning and end of the zakat year, zakat will be due, even if your assets fell below nisab for part or most of the year. Zakat is paid at the end of the zakat year, regardless of when the various pieces of property came into your possession. Even if cash came into your possession the day before the zakat year expires, you will have to pay zakat on it the following day. Should I use the gold or silver nisab standard?
What proportion of my property is subject to zakat?
What part of my property is not subject to zakat?
When does the zakat year begin?
My wealth fell below nisab for several months during the year. Am I still paying zakat?
I earned a large sum of cash a few days before the end of the zakat year. How can I calculate my zakat?
Savings
There are two ways to finance a pension: 1) Payments are deducted from wages before they come into the possession of the contributor. 2) The payer makes payments from money already in his possession. If payments are withheld from wages at source, so that the money never comes into the payer's possession, zakat is not due on the payments, nor on the amount that accumulates in the pension or retirement fund. Zakat becomes due only when money from the fund is paid and received by the contributor. If pension payments are made after the money enters the contributor's possession, then zakat is payable on the money accumulated in the fund. There are two types of stocks: those purchased by an investor who trades stocks, and those purchased for investment purposes. If you are an investor and have bought shares specifically to sell them and make a profit, then the entire market value of the shares is subject to zakat, since it is considered a traded share. However, if you bought shares as an investment and want to receive dividends, calculate the percentage of the company's assets subject to zakat and then pay zakat on that percentage of the value of your shares. To do this, look at the company's annual financial statements and determine what percentage of its assets are inventory, raw materials, cash, gold or other items subject to zakat. Buildings, machinery, vehicles, etc. that are essential to the company are not taxable. Do I pay zakat on my pension fund?
I have some stock. How can I calculate a zakat payable in my name?
Debt
Zakat is not payable on money owed for work until you are paid. Similarly, zakat is not payable on a dowry that you have not yet received, nor on a share of an inheritance that is due to you but has not come into your possession. Yes. You can either pay zakat for each year that elapses until you receive your loan back, or you can wait until you receive your loan and then pay the accumulated zakat all at once. If the loan is insecure and you are not sure if the borrower will be able to pay it back, it is better to delay zakat payment until it is received, at which point zakat accumulated over the years will be due. If you never receive the money back, zakat will not be due. Someone owes me money for the work I did for him, should I pay zakat on it?
I lent money to someone, do I pay zakat on it?
Business
The value of a commodity in a store is its market value, not its purchase price. You can calculate this by estimating how much you would expect to receive if you sold all the goods at once to one buyer. Yes, you will have to pay zakat on it. Although when calculating its value, you should take into account the price at which you can sell it. A loan taken to acquire zakatable assets such as raw materials, goods, etc. can be deducted from the capital. You pay zakat on what remains. A loan taken to acquire non-taxable assets such as furniture, machinery and buildings is not deductible. How do I calculate the value of my store's inventory?
I have "dead goods" in my store that I can't sell for many years, do I still pay zakat on them?
I took out large commercial loans to expand my business, how will this affect my zakat calculations?
General questions about zakat
Yes, zakat can be paid in advance before the end of the year, but make sure you have assets equal to or greater than nisab. To be eligible to receive zakat, the recipient must be a poor Muslim. A poor person is someone whose assets beyond his basic needs do not reach the nisab threshold. The recipient must not belong to the immediate family: spouse, children, parents and grandparents cannot receive zakat. Other relatives, however, may receive zakat. The recipient may not be a Hashimi, a descendant of the Prophet (may he rest in peace). Before the Eid al-Fitr prayer at the end of Ramadan, any adult Muslim who has food in excess of his needs must pay zakat al-Fitr for himself. The head of the household may also pay on behalf of his or her dependents, such as children, servants and elderly relatives. The head of the household is responsible for paying zakat al-fitr for all his dependents Zakat al-fitr can be paid during Ramadan, at the latest before Eid al-Fitr prayers, so that the poor can enjoy the day of Eid. The minimum amount due is the equivalent of about 2 kg of wheat flour, rice or other staple food for each household member, including children and dependents - even if they do not live in the same house. A safe estimate is about £5/$7 per person. Recipients of zakat al-Fitr are the poor and needy who are entitled to receive general zakat. Islamic Relief acts as a charitable agent, using zakat al-Fitr to purchase and distribute food on your behalf. For a donation to qualify as zakat, there must be a clear intention, either when separating the zakat money from the rest of the estate or when making the zakat payment. Not according to the Hanafi school. A child is not obligated to pay zakat even if he has assets above the nisab threshold. The first zakat payment will become due twelve lunar months after the child reaches puberty if he has assets above nisab. According to Imam Shafi and Imam Malik, a child with assets above the value of nisab is obligated to pay zakat, just like an adult. Can I pay zakat in advance?
Who can receive my zakat?
What is Zakat al-Fitr (fitrana)
During the year I donated a lot of money to charity. Doesn't that count as zakat?
Do I pay zakat on property belonging to my children?
Urgent appeals
Nigeria crisis
Crisis in Afghanistan
Assistance to the poor in Pakistan
Palestinian emergency situation
