Everything you need to Know about Zakat

Zakat is a pillar of Islam that needs to be fulfilled by every Muslim without fail, if eligible. Adult Muslims that meet the Nisab threshold are eligible to pay Zakat. Zakat is a term that refers to donating to the needful and is quite different from Sadaqah. Also, Zakat should not be confused with Zakat al Fitr. Read on to learn more about Zakat, who is eligible, and how it differs from Sadaqah and Zakat al Fitr.

Read More: Health Benefits of Salah

What is Zakat in Islam – Zakat Meaning

Zakat is an annual donation to a mandatory charity for eligible Muslims. Zakat applies to all disposable income and qualifying assets and property. Zakat is the third pillar of Islam, meaning “purifying” an individual’s wealth.

Who is Eligible to Pay?

Adult Muslims of sound mind with a minimum amount of wealth referred to as Nisab, must pay Zakat.

Nisab has to be maintained for a lunar year for Zakat to be paid when it is due. Essentially, a Zakat year commences when wealth equals or exceeds Nisab and should be calculated on that date every year henceforth.

Difference between Zakat, Sadaqah, and Zakat al Fitr

While Zakat is an obligatory donation to charity, Sadaqah and Zakat al Fitr are completely different. Sadaqah is a voluntary donation, and Zakat al Fitr is a mandatory donation that needs to be made before Eid al Fitr.

When is Zakat Due?

There is no certain time frame during which Zakat needs to be paid, but it needs to be done annually. Once the Nisab threshold is met and is constant for a complete lunar year, a Muslim must pay Zakat.

Calculating Zakat

The Prophet Muhammad (Peace be Upon Him) set Nisab at a rate equal to 612.4 grams of silver or 87.5 grams of gold. In this day and age, Nisab is equivalent to the value of gold or silver specified by the Prophet Muhammad (Peace be Upon Him) in local currency. Since the value of silver and gold fluctuates daily, the amount of Zakat is to be paid differs yearly.

What is Zakat Eligible On?

Zakat is paid on wealth and not income. For instance, if an individual earns $4000 per month and ends up saving $500 every year, Zakat is applicable on the money saved rather than the income.

Besides savings, Zakat is also applicable on cash in hand or in banks, money lent to others, pensions, property purchases for investment purposes, business stock in merchandise and trade, shares and stocks, livestock, and agricultural produce.

It is worth noting that Zakat does not apply on property or cars for personal use unless either is sold, making them trading goods upon which Zakat is due.

Can Zakat be paid before Ramadan?

As mentioned above, Zakat can be paid at any time as long as it is done annually. Payment of Zakat can be made before, during, or after Ramadan. However, it is not uncommon for most Muslims to pay Zakat during Ramadan because it yields the most rewards. Additionally, Zakat al Fitr also needs to be paid during Ramadan by adults with an excess of food.

Can Zakat be Paid Monthly?

Eligible Muslims can spread their Zakat payments over an entire year if it makes things easy. After calculating how much Zakat is due for a year, it needs to be divided by twelve.

What about Missed Zakat?

Many miscalculate or forget to pay Zakat or are new to the concept. Fortunately, all is not lost, as the amount Zakat missed can be paid off. Missed Zakat is calculated the same way as calculating Zakat for the current year. The only difference is that the Nisab will vary from the Nisab of the current year.

Who is Eligible to Receive Zakat?

There are seven types of people eligible to receive Zakat, they are as follows:

1. The poor
2. The needy
3. A person in debt
4. Reverts to Islam
5. Wayfarers
6. Those in captivity
7. Those in the cause of Allah

Zakat can be given to help those in need and also to improve education, health, security, and the environment.

Hopefully, the information above will provide a quick insight into Zakat, its workings, and how it benefits the community. One thing is for certain, though, Zakat is a pillar of Islam that should not be ignored and must be paid with complete commitment and dedication for God’s mercy and blessings for one’s continued success.