Zakat Explained
Zakat al-Maal
"Take from their money a charity to cleanse them and purify them." (Qur'an 9:103)
The word Zakat, meaning 'purification‘, is the amount of money that every financially able adult Muslim has to pay to help the poor and those in need. Zakat is clearly mentioned in the Qur’an as an obligation upon Muslims and exactly how it must be spent (on the poor, destitute etc).
Who is eligible to pay?
Anyone who owns assets (including money), worth more than the threshold (nisab) figure of 85g (3oz) of gold or its cash equivalent has to pay Zakat of 2.5% on the whole value.
We should use the alternative nisab of 595g (21oz) of silver to calculate Zakat, IF using the gold nisab means we are not eligable to pay Zakat - BUT don't consider ourselves to be in financial hardship.
Easiest way to work out Zakat
At any day of the year (eg 21st Ramadan) add up the value of your gold, silver, savings, cash, shares etc – these are your total assets. Minus from this any money you owe and any bills immediately due – these are your liabilities. If the balance is more than the nisab value, then you have to pay Zakat of 2.5% on the whole amount.
Points to remember
- Zakat is only due on assets held for more than a lunar year.
- Zakat is not due on your main home.
- Mortgage loans should not be deducted from your assets.
- Businesses also need to pay Zakat on their profits and stock.
Example
If the nisab is £1,730 this Ramadan - and you have savings of £800 and gold worth £1,200 (Total £2,000), then you have to pay 2.5% of the whole amount as Zakat – which = £50.
Zakat al-Fitr (Fitrana / Fitra)
Zakat al-Fitr is a small charity that muslims are required to pay to help the poor join in the Eid celebrations. The Zakat al-Fitr for this year (1430 - 2009) is £3 per family member and must be paid before the Eid prayer at the latest.
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