Zakat

FAQs

WHAT IS ZAKAT?

Zakat means alms, but the actual meaning of Zakat is purification and growth, thus encouraging growth and equality amongst the population and community whilst sharing one's wealth with his fellow beings. It is an obligation upon all sane, adult Muslims whose total annual wealth meets or exceeds the nisab value, and it forms one of the central Five Pillars of Islam.

By giving a fixed percentage of your overall wealth each year to support those in need, you will be fulfilling the wishes of Allah (SWT) and completing a key component of your faith.

With your zakat donation, expect to see changes for the better in many countries around the world. You’re really blessed and with your help, together we can fix the rest.

FREQUENCY OF ZAKAT

Giving Zakat on an annual basis is seen as an important religious duty in Islam. It becomes obligatory upon an individual when a certain amount of maintained money or wealth is reached and exceeded. If the individual’s amount of profitable wealth falls below the nisab value, then that individual is not liable to pay Zakat in that given lunar year*. If the amount of personal, profitable wealth meets or exceeds the nisab value, then the individual must pay 2.5% of the total amount above the nisab value as Zakat in that lunar year.

* Based on the lunar cycle, an Islamic calendar year is 355 days on average.

WHAT IS THE NISAB VALUE?

The nisab value is the term given to the threshold at which Muslims are eligible to pay Zakat. Two differing values are used to calculate the nisab threshold; these are the current monetary worth of 87.48 grams of gold and 612.36 grams of silver. When working out the amount of Zakat you need to pay, the value taken is the precious metal cost on the date of the calculation, which applies to the total wealth held for a full Islamic lunar year.

Another Islamic term you may find referenced is ‘Hawl’ – this is the term used to describe the Islamic lunar year. Zakat payments must be made once every Hawl from the date your total wealth exceeds the nisab value and has remained above the threshold for an entire lunar year.

If your wealth changes, you will need to adjust your Zakat accordingly to ensure you are paying the correct amount. Similarly, if your wealth drops below the nisab value, you will no longer be eligible to pay Zakat.

‘As-Sadaqat (Zakat) are only for the Fuqara' (poor), and Al-Masakin (the needy) and those employed to collect (Zakat funds); and for to attract the hearts of those who have been inclined (towards Islam); and to free the captives; and for those in debt; and for Allah's Cause (i.e. for Mujahidun - those fighting in the holy wars), and for the wayfarer (a traveller who is cut off from everything); a duty imposed by Allah. And Allah is All-Knowing, All-Wise.’
- Holy Qur’an (9:60)

WHO IS ELIGIBLE TO PAY ZAKAT?

 Zakat rules define those eligible to pay as being:

  • Of Muslim faith
  • Sane and in good health
  • Free and not in slavery
  • Past the age of puberty
  • With wealth greater than the nisab value
  • With a positive goods or cash flow

To summarise, those eligible to give Zakat are adult Muslims, working or earning more than the nisab value and able to meet their and their family’s daily needs without struggling.

CALCULATE YOUR ZAKAT NOW

WHO IS ELIGIBLE TO RECEIVE ZAKAT DONATIONS?

On the other hand, Zakat must be distributed amongst eight set groups of people as defined in the Holy Qur’an:

  • The Poor (Fakir)
  • The Needy (Miskin)
  • An Islamic Revert in Need (Muallaf)
  • The Collector of Zakat (Amil)
  • Slaves (Riqab)
  • A Stranded Traveller in Need (Ibnus Sabil)
  • A Debtor (Gharmin)
  • Those Practising, But in Need and Away from Home (Fisabillillah)

WHEN CAN ZAKAT BE PAID?

Although you can give Zakat at any time of year or given in monthly instalments (twelve equal payments), many Muslims choose to pay their Zakat during the Holy month of Ramadan. This is because the rewards and blessings of giving in this month are far greater than at any other time of the year. 

HOW TO CALCULATE YOUR ZAKAT

Your personal finances and assets contribute to your total wealth, however, essential items that are necessary for comfortable day-to-day living are exempt from the Zakat total. This includes the home you live in and the primary car you drive, but it’s worth noting that Zakat is due on any additional vehicles and second properties you may own.

The following items - your liabilities - should be exempt from your Zakat calculation:

  • Personal items such as clothing and appliances
  • Any money you owe to others, including mortgages, personal loans and card debts
  • Bills and the rent or mortgage payment for the month in which your Zakat payment is due
  • Any short-term business loans or overdrafts, if applicable
  • Business expenditures including salaries, bills and building rent

When calculating the total amount of Zakat you need to pay, you will also need to consider the following assets:

  • Cash in savings, at home or in bank accounts
  • Money raised and set aside for property, weddings, hajj etc
  • The total value of owned gold and silver
  • The full value of any held shares at market value
  • If applicable, the complete value of all business stock you own
  • Rental income from any properties you own
  • Any lent money in debt to you that you expect to see returned

With all this information in mind, you can then work out your total wealth using the following calculation:

Personal and business assets – short-term liability = your total wealth

If this figure is above the nisab value, you are eligible to pay Zakat.

ZAKAT 2020

Whilst Zakat is an obligatory religious duty, it is also a meaningful reminder that everything we have been given in this life is worldly, material goods and is not ours. Anything that is given to us belongs to Allah (SWT) and it is seen as our duty to share it amongst His creation.

To calculate the exact amount of Zakat you need to pay, you can use our handy Zakat calculator. 

CALCULATE YOUR ZAKAT NOW

OUR AIM

Our main aim is to guarantee that every pound of zakat paid by UK Muslims is paid appropriately. We also strive to ensure that those who are eligible to receive zakat in our own communities get the care and support they need.

We are proud to be able to say that 100% of our zakat funds are distributed in line with Sunnah and the Holy Qur’an. In addition, our zakat practices are fully authenticated and audited by the Al-Qalam Shari’ah Panel.

zakat applicable projects

FAQ Questions asked frequently

When is Zakat Paid?

Your zakat payment period for the year will start on the date when your wealth first equalled or exceeded the nisab. After this, zakat must be calculated and paid once each lunar year has passed, and it will then fall every year thereafter on that date. If you are not able to remember this date, then you should make an estimate. If this is not possible, you should select a specific Islamic date to adhere to, instead. It is not obligatory to pay zakat during Ramadan, but many Muslims prefer to as giving to charity during this time guarantees greater rewards.

When Must Zakat Be Distributed?

Once it becomes due, zakat should be paid as quickly as possible. At the very latest, eligible zakat should be distributed one Islamic year after the date when it is due. Delaying payment without a valid reason is a sin.

Where Should Zakat Be Distributed?

If possible, it is better to give zakat in your local community. This is due to the instruction that the Messenger of Allah (PBUH) gave to his companion, Mu’adh, who was sent to Yemen to spread the message of Islam.

“O Mu’adh! Inform them that Allah (SWT) makes zakat obligatory for them. (It is) to be taken from their rich and given to their poor.” [Bukhari]

However, we must also distribute our zakat to people who are in great need across the world. We must learn to balance the giving of our zakat between local, national and international aims, without overlooking the importance of supporting those in need here in our own communities. After all, the number of eligible zakat recipients here in the UK is increasing – these people are entitled to the support of zakat payers in their own country.

How Do I Calculate My Zakat?

You can use our handy online tool to calculate your zakat quickly and easily.

Can I Spread Payments Over the Year?

You can set up a regular monthly payment like a direct debit if you wish to pay your zakat in smaller instalments. If you choose to pay your zakat with Al Mustafa Welfare Trust, certain campaigns and sponsorships are zakat-eligible so you can spread the rewards of your generosity throughout the year.

What Happens if I Miss a Payment?

If zakat has not been paid in previous years, an honest attempt must be made to calculate the outstanding amount of money owed. You must then ensure that this is paid as a matter of urgency.

Can I Gift Aid My Zakat Payment?

Yes! Gift Aid is a valuable tax concession which enhances the value of donations made to registered charities by 25%. All UK taxpayers can Gift Aid their payments.

Can Zakat Be Paid in Advance?

Zakat can be spread throughout the year, but the total amount must be paid by the due date.

What Wealth Does Zakat Include?

Applicable assets to include in your zakat calculation are as follows: cash, shares, pensions, gold, silver, business goods, crops and cattle. Personal items like your home, furniture, cars, food and clothing do not count towards your total, although zakat is due on any investment properties.

What are Tola, Bhori and Yori?

Tola is a unit of weight used in the Asian subcontinent which equals the weight of a silver rupee. It is also known as bhori or yori. One tola equals 11.66 grams, meaning that 87.48 grams of gold equals 7.5 tola.

What is the Nisab?

Nisab is the wealth threshold a Muslim must meet or surpass for a year before zakat is owed.

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