What is Zakat and why should Muslims pay it?
Zakat (also known as 'Zakah'), is the giving of a set amount of your wealth to charity. Muslims pay Zakat as an act of worship, and although it is sometimes compared to a tax, it isn't like taxes imposed by governments. Zakat is a spiritual duty, solely for the sake of Allah.
It is the third pillar out of the five pillars of Islam and extremely important to Muslims around the world. Zakaat is mentioned alongside Salah (also spelled as 'Salat') in 82 verses of the Qur'an.
The five pillars of Islam are:
- Shahadah: reciting the profession of Islamic faith.
- Salah: praying five times a day and performing ritual cleansing.
- Zakat: paying a certain amount of money to a charitable cause.
- Sawm: fasting during the month of Ramadan.
- Hajj: making a pilgrimage to Mecca.
So, what does Zakat mean?
The Arabic word 'Zakat' literally means 'to cleanse' or 'purification' and by fulfilling this religious duty, Muslims ensure that their wealth has been purified for the will of Allah.
"True piety is this: to believe in God, and the Last Day, the Angels, the Book, and the Prophets, to give of one's substance, however cherished, to kinsmen, and orphans, the needy, the traveler, beggars, and to ransom the slave, to perform the prayer, to pay the zakat." Surah Baqarah, Ayah 177 (Qur'an 2:177)
What are the benefits of Zakat?
Zakat has many spiritual and worldly benefits. Muslims believe that by paying Zakat they are doing Allah's will and acknowledging that all of their wealth comes from Allah as a loan - they do not own anything themselves.
By performing Zakat, Muslims learn to behave with honesty and to place less importance on material possessions. Zakat is about practicing self-discipline and freeing oneself from greed, the love of money, and the love of oneself.
Why pay Zakat? Is it obligatory?
Muslims must pay Zakat to fulfil the commandment of Allah and to take care of needy people around the world. Charity existed in Islam from the very beginning of the formation of the faith, and Zakat's obligatory status is based on the book of Allah, the Qur'an, the teachings of the Prophet Muhammad, and the consensus of his companions.
Who has to pay it?
Every Muslim who has reached puberty, is of sound mind, and has above the minimum required amount of wealth (Nisab) is required to perform Zakat.
How much do I have to give?
The usual amount donated is 2.5% of a person's total cumulative wealth in one lunar year. The value of the Nisab in prophetic tradition is 87.48 grams of pure gold, or 612.36 grams of silver. The monetary value of the Nisab will vary by current prices, and scholars recommend that Muslims apply the Nisab value of silver instead of gold, to ensure that more people are eligible for Zakat.
Did you know?
It is recommended that the recipient of Zakat invokes blessings for the Zakat payer at the time of its payment. The Prophet Muhammad, when any persons brought charity to him, he would say "O Allah, bless the family of so and so".
When do I pay Zakat?
The date that your wealth equals (or is greater than) the Nisab should ideally be marked as the beginning of your first Zakat year. Once one lunar year (Hawl) has passed, then you should pay Zakat. It's a good idea to keep paying on the same date (or thereabouts) each year, in order to ensure that you adequately fulfil this spiritual duty. If you can't remember when you first started to own the Nisab, choose a special Islamic date that's easy to adhere to.
Many people choose to give their Zakat in the month of Ramadan, because it is a time of great blessings and the rewards for good deeds are believed to be even greater in this sacred month.
Who should receive Zakat?
The categories of the people who can receive Zakat, are clearly mentioned in the Qur'an. Allah says, "Zakah is only for the poor and the destitute, and for those employed to collect it."
Anyone who is poor or destitute is eligible to receive Zakat, including those who are in debt and unable to pay it back. The poor refers to those who have the minimum amount of wealth whereas the destitute are those who own nothing.
The 8 categories of people entitled to Zakat
A hadith of the Prophet Muhammad, narrated by Ziyad ibn al-Harith narrates that there are a total of 8 categories entitled to Zakat, including:
- The poor
- The destitute.
- Those who collect zakat (i.e charity organisations).
- Those who are to be reconciled (this refers to those people whose reconciliation of hearts is intended if they are given a portion of zakat wealth in order to reconcile their hearts).
- The emancipation of slaves
- For those in debt.
- For those in the way of God (Allah).
- For travellers.
Those who are travelling and unable to return home, Muslims in bondage or slavery, and administrators of Zakat are also deemed worthy recipients of Zakat.
What constitutes Zakat?
Zakat is compulsory on four types of wealth that are the most popular sources of income among people, such as money, trading goods, agricultural products and animals. Money includes financial assets including cash, bonds, stocks, savings, loans given, and funds received.
Zakat on property & jewellery
A pension and any property owned for investment purposes should be taken into account. Cattle and crops constitute to agricultural products and as such fall under Zakat, as do gold and silver and ornaments made from gold and silver only, even if the precious metals are used for decorative purposes. The amount of Zakat payable on gold with a weight of over 87.480 grams, whilst Zakat is only payable on silver over 612.35 grams. You can visit a local jeweller to have the value of gold and silver jewellery checked.
As mentioned previously, Zakat is not payable on previous stones like pearls, diamonds, sapphires rubies, corals, chrysotile, or any kind of precious stones unless they are used for trading purposes.
Zakat on shares
Zakat is obligatory on the shares of trading companies, based on the real value if their worth amounts to the Nisab of gold. Zakat has to be paid on both the capital and the profits at the end of the year. The easiest way to calculate Zakat is to find out the monetary value of each type of wealth and then work out 2.5% of the total sum.
Which items do not fall under Zakat?
You don't have to pay Zakat on:
- Your personal home. If you have more than one house, this is the residence you spend the most time in.
- A car you own for personal use.
- A debt you are owed, but only if you're not confident that you will be repaid.
- Any jewellery that doesn't contain gold or silver.
- Furniture and household goods for personal use (things that you're not planning to sell).
Misconceptions around performing Zakat
Zakat is not:
- About giving to charity out of kindness. Zakat is different to regular charitable giving (such as sadaqah or sadaqah jariyah), because it is a yearly spiritual obligation. Muslims are also expected to donate to good causes out of personal generosity.
- A tax. Tax is requirement of secular (non-religious) law.
- For building mosques.
- For burying the deceased or clearing their debts.
- Optional. All Muslims should pay their Zakat.
So, how do I pay Zakat?
Using our Zakat calculator, you can find out the exact amount that you owe.
Click here to calculate your Zakat now.
Zakat makes the world a better place
If you're a Muslim, it's essential that every bit of your offering reaches those who need it most. By donating to one of Human Appeal's projects, we can guarantee that your gift is being used to fight poverty and make a difference in the lives of the marginalised and vulnerable.
We are one world, and by paying Zakat, you are fulfilling both a spiritual duty and an obligation as a kind, caring and responsible human being.