Can a mother give Zakat to her son? Can we give Zakat to our parents? Do I pay Zakat on livestock? This week’s Kutuby blog answers it all. Read on to learn what Zakat is, who is obligated to give it, who stands to receive zakat, how much is required to give away and everything in between.
Know Your Zakat Basics
To start off, we need to understand what Zakat actually is. Zakat is one of the pillars of Islam, the third one to be exact. It is a charitable donation that Muslims pay annually, the amount being 2.5% of the surplus wealth in their possession. This donation is an obligatory act of worship for the sake of Allah SWT, not to be confused with any form of tax or charity. Zakat constitutes 2.5% of all the savings and assets in your possession that are not included in your living expenses.
What Is Nisab?
Nisab is the minimum specific amount used to calculate zakat for each wealth category that can be zakat-applicable. After covering all of a person's basic living expenses for an entire lunar year, the nisab is calculated based on a possession that remains in one's zakat-applicable category of wealth. This excludes everything an individual currently needs, like their home, car, food stored in the refrigerator, clothes, and furniture. Therefore, there is no obligation to pay zakat at the end of the lunar year if one earns a certain amount of money and uses it all to meet basic needs and avoid unnecessary luxury
However, if he or she saved some of the money in that lunar year, Zakat is due on the rest, if it is equal to or greater than nisab.
The Nisab (minimum wealth) threshold in Islamic law is set at either 3 ounces of gold or 21 ounces of silver. We are able to calculate their cash value online because we no longer deal in gold and silver as our currency.
For Gold
According to the gold standard, the Nisab is either cash or 3 ounces (87.48 grams) of gold. You can work this out depending on the running price of gold at the time.
For Silver
According to the silver standard, the Nisab is either 21 ounces of silver (or its equivalent in cash) or 612.36 grams. This can be estimated by multiplying the number of grams by the silver's current market value online.
The Purpose & Impact Of Zakat In Society
If a person's wealth is greater than the value of Nisab, they are obligated to pay it.
Zakat protects the poorest members of society from hunger and poverty while also purifying our hearts from selfishness. Both those who have given their wealth for Allah's sake and those who are due to receive it benefit from Zakat. By contributing to Zakat, we acknowledge that our wealth is a blessing to be shared rather than our own.
Zakat has an impact on society in the following ways:
- Reestablishes human dignity and restores it.
- It aids in bridging the wealth-to-poverty ratio.
- It creates social security and ends social conflict.
- Alleviates poverty.
- It prevents the poor from using illegal or unconstitutional means of earning a living, giving hope to those who may be feeling hopeless.
- Teaches selflessness and generosity.
- Financial assistance in the form of clothing, shelter, and food.
- Helps in raising awareness regarding real issues around you and the world.
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Do I Pay or Receive Zakat?
Zakat, like all other Islamic obligations, is only required if certain conditions are met. You must be a Muslim, be over the age of puberty, and have enough nisab to be eligible for Zakat payment. You are required to pay 2.5% Zakat on all of your savings and other assets if any of the aforementioned conditions are met. After a full lunar year has passed, you must pay zakat if your qualifying wealth has been held for a full year. Therefore, the date on which your wealth first equaled or exceeded the nisab is the beginning of your Zakat year, and this date should be used to calculate your Zakat for each subsequent year.
The eligibility to receive zakat is mostly calculated by scholars based on the following verse of the Qur’an.
“Alms-tax is only for the poor and the needy, for those employed to administer it, for those whose hearts are attracted ˹to the faith˺, for ˹freeing˺ slaves, for those in debt, for Allah’s cause, and for ˹needy˺ travellers. ˹This is˺ an obligation from Allah. And Allah is All-Knowing, All-Wise.”
-Qur’an 9:60
As can be seen, there are eight groups of people who stand to gain from the Zakat that is collected. Since these two groups have the greatest and most pressing needs, Zakat is primarily distributed to them in current times. The recipient must be poor and/or in need in order to be eligible to receive zakat. A person who does not have enough assets to meet the nisab definition is considered to be poor. Your immediate family must not be the recipient; Your Zakat cannot be distributed to your parents, grandparents, spouse, or children. A daughter/son cannot give Zakat to her/his parents.
Zakat al-Fitr
Every adult Muslim who has more food than they need must pay Zakat al-Fitr (fitrana) before the Eid al-Fitr prayer at the end of Ramadan. The head of the household can also pay Zakat al-Fitr for their children, servants, and any other relatives who are dependent on them.
Zakat al-Fitr can be paid during Ramadan, preferably before the Eid al-Fitr prayers, so that the poor can also enjoy Eid.
Each member of the household, including dependents who do not reside in the same residence, is required to pay the minimum amount, which is approximately 2 kilograms of wheat flour, rice, or another staple food. Roughly £5/US$7 per head is a safely assessed sum.
How To Calculate Zakat?
- Add up all of your income sources
Compile a list of all the assets you've owned in the past year. This comprises:
Your total income comprising of cash, gold and silver, debts owed to you, investment property, shares and stocks, investment and savings funds, and business assets.
- Take a look at your immediate needs and the costs of living
Your living expenses are the sum of your personal and living expenses, debts you owe, and business expenses.
- Determine your total zakat-applicable wealth
This is your living expenses subtracted from your total wealth.
- Verify that it is above the Nisab threshold
The total zakat you owe for the year is equal to your zakat-applicable wealth times 2.5%.
Still not able to calculate?
Here’s a simple and easy calculating tool that can help you measure your Zakat. Click here.
Kutuby Fam! We hope we have covered any confusion you have and would definitely like to hear from you. Talk to us on our Facebook and Instagram and check out our YouTube videos made especially for kids on our free online Islamic educational platform. See you next week!
