Zakat Explained: Who Pays and How Much

Zakat means purification and growth. It is an act of worship and a duty, not only a kind gift. Allah mentions it together with prayer in many verses, for example Quran 2:43.

Prophet Muhammad ﷺ taught that Islam is built on five pillars, and zakat is one of them. When he sent Mu'adh to Yemen, he told him to teach the people that Allah has made zakat obligatory on their wealth, taken from their rich and given back to their poor. Quran 51:19 describes the share of the beggar and the deprived as a right in the wealth of the righteous, so it is not a favour.

Zakat cleans the wealth of the giver and the heart from greed. It also supports people in need.

Zakat is due on wealth that you own and can use. A lunar year is a little shorter than a solar year, so your zakat date comes about eleven days earlier each year in the solar calendar.

You must pay zakat if all three points are true.

• You are a Muslim.
• You own wealth above the nisab.
• You have kept that wealth for one full lunar year.

The year condition does not apply to farm produce, which is due at harvest (Quran 6:141). The nisab is commonly given as the value of 85 grams of gold or 595 grams of silver, and all four schools agree on these two amounts. They differ on which one to use for money. The classical Hanafi view favours silver, because its lower value means that more people pay and more poor people benefit. Many scholars and zakat authorities today use gold, because its value is more stable. Ask a trusted scholar or zakat authority which one they follow, and check the current price. Scholars also differ on how far debts that you must pay soon are deducted from your wealth.

The rate is 2.5 percent, which is one fortieth, of your zakatable wealth on your zakat date. For example, if you hold 10,000 in savings on that date, the zakat is 250. Zakat is paid on these kinds of wealth:

• Cash and savings
• Gold and silver
• Goods that you hold for trade

Farm produce and livestock have their own rates and rules, so ask a scholar about them.

You do not pay zakat on the home that you live in. You also do not pay on items for personal use, such as clothes, furniture and a car that you use for your own needs. The Prophet ﷺ said that a Muslim does not owe zakat on his horse or his servant, which were the tools of daily life.

Scholars differ about gold jewellery that is worn for personal use. The Maliki, Shafi'i and Hanbali schools say that no zakat is due on jewellery that a woman is permitted to wear, while the Hanafi school says that zakat is due on it once it reaches the nisab. A qualified local scholar can guide you.

Quran 9:60 names eight groups that may receive zakat.

• The poor
• The needy
• Those who collect and distribute zakat
• Those whose hearts are being won over
• Those who are freeing people from slavery or captivity
• Those who are in debt
• In the cause of Allah
• The traveller who is stranded

Scholars agree that you may not give your zakat to your own parents, grandparents, children or grandchildren, because you must support them already. A husband may not give zakat to his wife for the same reason. Zakat is also not permitted for the family of the Prophet ﷺ. Scholars differ on how some of the groups apply today, such as those whose hearts are being won over and those in the cause of Allah, and on whether zakat must be shared among all eight groups or may be given to one of them. Most scholars allow it to be given to one group.

Pay when your lunar year is complete. It helps to choose one fixed zakat date each year and to calculate on that day. Do not delay without a reason.

Many Muslims choose Ramadan as their date because rewards are greater in that month. This is fine if you plan it in advance.

Give zakat with a sincere intention, and do not make the receiver feel small. Allah knows what you give and why you give it.