WHAT IS ZAKAT?
Zakat is one of the five pillars of Islam. It is an Arabic word which literally means “that which purifies”. Therefore Zakat is a way to purify your wealth and income. This purification occurs by giving a portion of your wealth to charity. It is important to note that Zakat is not a tax, rather it is an act of worship dedicated to supporting those in need. Zakat is both a spiritual duty and a vital part of the Islamic social welfare system.
WHO PAYS ZAKAT?
Zakat is obligatory for anyone who meets the following criteria: a free adult Muslim, of sound mind, in complete ownership and control of their wealth (which must meet or exceed the nisab threshold), and in possession of their wealth for one complete lunar year.
WHERE DO ZAKAT PAYMENTS GO?
The recipient must be someone in need. They must not belong to your immediate family. They must not be a descendant of the Prophet (PBUH). The Holy Quran tells us in Surat At-Tawbah 9:60
There are eight categories of people to whom Zakat can be distributed. These have been identified as:
1. Al-Fuqara: The Poor
This refers to those who do not own any Zakatable asset nor surplus asset which equates to the Nisab.
2. Al-Masakin: The Needy
The needy are the people whose earnings do not cover their basic needs. According to some scholars, they are those whose economic status is worse than the needy. In essence, they refer to those people who do not own any Zakatable asset nor suplus which equates to the Nisab.
3. Al-‘Amilina ‘Alayha: Administrators of Zakat
4. Al-Mu’allafate-Qulubuhum: Reconciliation of Hearts
This term applies to people who have embraced Islam or who are inclined to it.
5. Fir-Riqab: For those in Bondage
Zakat may be allocated to help Muslims free themselves of bondage / slavery.
6. Al-Gharimin: Those in Debt
Zakat maybe given to those in debt. Those individuals whose liabilities exceed their Zakatable and surplus assets can receive Zakat to pay off debt.
7. Fi-Sabilillah: In the Cause of Allah
Muslim jurists differ on who or what can be covered under this category, although most seem to agree that it can be used in the defence of Islam. In the wider sense however, this channel covers promoting the Islamic value system.
8. Ibnas-Sabil: The Wayfarer
A wayfarer refers to a traveller who left his home for a lawful purpose and for whatever good reason does not possess enough money to return home, even if he is rich in his own country.
TO WHOM CAN ZAKAT NOT BE GIVEN?
Muslim jurists agreed that Zakat cannot be given to the following people:
1) The rich (except when such are among the workers of Zakat).
2) Those capable but not willing to work.
3) People hostile to Islam.
4) Ascendants, descendants and wives of the payer.
WHAT IS OUR 100% DONATION POLICY?
If you choose to give your zakat to Tri-State Islamic Center, we will then distribute 100% of your Zakat donation where it will be most impactful, helping struggling families and vulnerable people to get back on their feet and thrive. Tri-State Islamic Center does not keep or use ANY single penny of your Zakat donation and the full amount will go directly to those in desperate need in order to gain 100% of the reward of your donation and to benefit the poor and the needy groups first.
HOW MUCH IS NISAB?
There are two measures for determining how much the nisab value is for Zakat – either based on gold or silver. The Nisab was set by the Prophet Muhammad (peace be upon him) at 7.5 tola of gold and 52.5 tola of silver (One tola is equal to 11.66 grams). These values state that nisab is equal to three ounces of gold (87.48 grams) or its cash equivalent, or 21 ounces of silver (612.36 grams) or its cash equivalent. In today’s day and age we do not use silver or gold as a monetary exchange so when calculating your Zakat, you need to find out the equivalent of the rates the Prophet (peace be upon him) set but in your local currency. This can be done by checking the market rate of gold and silver today.
Remember you only pay Zakat if your net assets equal or exceed the Nisab threshold. If you only have gold as an asset, then the Nisab measure for gold must be used. If, however, you have a mixture of assets, then the Nisab level for silver should be used. Although some scholars still maintain that gold should be used regardless, using silver is safer and more beneficial for the recipients of Zakat. In most cases, this means that if your net assets (income and savings) are above the silver Nisab threshold, you must pay Zakat on the total amount of wealth you own.
WHAT IS HAWL?
In explanations of Zakat, you may hear the term hawl – which means a lunar year. A hawl (lunar year) is 354 days long. Sometimes it is simply referred to as an Islamic year. The actual payment of Zakat is to be made one hawl (lunar year) after you become eligible to pay Zakat, if your wealth on that date is still at – or above – the nisab threshold. It does not matter if your wealth decreases or increases during the year. It is the value of your wealth / assets at the end of the lunar year (Zakat anniversary) that is used to calculate and pay the Zakat (if it still exceeds the nisab).
HOW DO I CALCULATE ZAKAT?
You don’t have to do lots of complicated maths to work out your Zakat payment – simply go to our handy online Zakat Calculator and it will do it for you based on your assets, savings, investments, goods, debts and loans. In any case, you should follow these 4 basic steps when calculating your Zakat:
1. Sum up the value of all Zakatable assets (What you own)
2. Sum up the value of all deductible debts and/or liabilities (What you owe)
3. Work out the balance and check that it’s more than the Nisab value
4. Work out 2.5% of that and there you go,you’ve got your Zakat amount
HOW MUCH ZAKAT DO I NEED TO PAY?
After calculating all your zakatable assets, then deducting all your liabilities, you pay 2.5% on the net zakatable asset figure.
On agricultural goods, precious metals and livestock, the rate varies between 2.5% and 20%
WHAT TYPES OF WEALTH ARE INCLUDED IN ZAKAT?
Assets that are included in the Zakat calculation are cash (in hand and in bank accounts), shares, pensions, gold and silver, business goods, crops and cattle and income from investment property. Personal items such as home, furniture, cars, food and clothing (so long as not used for business purposes) are not included.
WHEN SHOULD I PAY ZAKAT?
Zakat is due on a yearly basis when a morally-responsible Muslim possesses the minimal zakatable-amount (nisab) above and beyond his debts and immediate expenses, and a complete lunar year passes over it. It is due immediately upon your Zakat anniversary. If you’re not sure when this is or you’re paying for the first time, simply work out the day you first owned wealth over and above the Nisab threshold (if you don’t know the exact date you can estimate). Once you’ve paid your Zakat once this then becomes your Zakat anniversary. Some Muslims choose to pay their Zakat during the month of Ramadan as rewards for good deeds carried out at this blessed time are multiplied. However, there is a duty to pay Zakat when it becomes due and not to delay the payment. Wealth can fluctuate during the year, going above and below nisab. Zakat is only due if wealth is in excess of nisab at the person’s Zakat due date.
CAN ZAKAT BE PREPAID BEFORE MY ZAKAT ANNIVERYSARY?
Zakat can be pre-paid before your Zakat anniversary. This is to encourage people to increase in worship and make the most of blessed times like Ramadan or the first ten days of Dhul Hijjah. If you do pay early, you still need to work out your Zakat due on your Zakat anniversary to make sure you’ve paid the right amount.
I GIVE CHARITY THROUGHOUT THE YEAR, CAN IT BE CONSIDERED AS ZAKAT?
No, there must be a clear intention that a donation is for Zakat. Giving to charity with a distinct purpose is very important in the Zakat process - like any obligation in Islam, Zakat requires intention.
SHOULD RECIPENTS BE TOLD IT IS ZAKAT?
If you give your Zakat directly to the recipient, you do not have to tell them that it is Zakat – this may cause them to be hesitant in accepting it due to the fact that they feel they are not needy enough to accept it / doubt their eligibility as a Zakat recipient – this is sometimes caused by the lack of education on Zakat.
WHAT IF I MISS A ZAKAT PAYMENT?
If Zakat has not been paid in previous years, whether through negligence or ignorance or error, then an honest attempt must be made to calculate the payment owed. This must then be paid as a matter of urgency
Do you Still have questions? Get in touch with our team