Let’s Talk Money: Zakat

Salaam my wonderful readers (sappy intro much? I must be feeling extra sentimental today…)!

After doing my review of the New Muslims Mini Library, I really wanted to write a post about zakat, its importance, and how exactly it is done. I remember for a really long time I was very confused about how exactly zakat was supposed to work (I have two liberal arts degrees, numbers are not my thing), how I would know if I had to give it, how much to give, where to give it to, etc. etc.

My first year as a convert, I threw all rules to the wind and just stuck my bank account total in an online zakat calculator and gave it out the next day…needless to say I was feeling quite zealous. The next year (last year), I actually became aware that there are specific rules and circumstances for giving zakat, and got a little confused on things like whether I had had the amount for a year, or if my account had dipped below the required amount, and also how to figure in my debt and loans that I was beginning to make payments on.

There are still some things that I am a little unsure about (how to figure in student debt from pre-Islam days?), but for today’s post I am going to keep it pretty general and stick to the basics, just so you will have an idea to go off of. Like I say on my disclaimer page, anything specific or unclear, you should always go to your local imam or religious authority!

So, what is zakat and why is it important?  Zakat is the third pillar of Islam, and it is mentioned in the Qur’an in conjunction with salah, the five daily prayers, 80 some-odd times. Linguistically, it is connected with ideas of increase, augmentation, and purification (of one’s wealth) from the bounty of Allah swt. Legally, in Islam, zakat represents a percentage of certain properties that is to be given each year to a certain kind of beneficiary.

But really, it is so much more than either of those things. Zakat is important, not only legally, in that it is the third pillar of Islam and denying it could, according to some, even take you out of the fold of Islam, but it is also so spiritually important for the giver, and just as important to the general Muslim society.

Zakat is meant to be an institution to help fulfil the needs of those less fortunate among the community. It helps to bridge the ever-growing (in the West, at least) gap between rich and poor, and it helps to foster love and connection among the believers. For the giver, it should be a means of cleansing ego and stinginess, and investing Allah’s barakah (blessing) in the wealth that is left over.

The Prophet (saws) said: “Whoever does the following things would taste the sweetness of faith: to worship Allah swt alone, and testify that there is no true god except Allah, and give zakat willingly.”

Narrated in Ahmed

It is also narrated in Tirmidhi that the Prophet (saws) said:

“…Never will a slave’s (of Allah swt) property diminish as a result of charitable donation.”

The property that you own determines the amount of zakat to be paid, or if it is to be paid at all. The first step in paying your zakat is determining whether you own the right kind of property that needs to be paid on, and if so, does it reach the required level for zakat (in Arabic the nisab)?

There are five basic kinds of property that requires zakat:

  1. Gold and silver, whether for jewellery or decoration in the home
  2. Monetary funds, in interest-free bank accounts or cash on hand
  3. Livestock; sheep, cows, camels
  4. Farm produce, such as stored barely, grain, dates, raisins, etc.
  5. Commercial stock

The amount you need to have in order for it to be subject to zakat is slightly different for each type of property. For pure gold the nisab is around 85 grams, and for silver it is around 595 grams (though in the Hanafi school it is higher). It will have to be calculated specifically based on how many carats of gold you have, but I am not going to get into those kind of numbers here. The nisab for money is calculated based on the nisab of gold (current monetary price of gold times nisab), which in my case is best left to a local imam or reliable calculator service!

As I can imagine that it is not very relevant to most here, I will leave out livestock, produce, and commercial holdings.

Another condition of zakat is that you must have the nisab in your possession for a full lunar year, 12 lunar months. For example, if the current nisab is $5,000, and you see that you have had $5,000 or above in your bank account from last Ramadan until this Ramadan, zakat would then be payable on it.

After you determine which of your properties reaches the nisab, you need to calculate how much needs to be paid. Zakat for gold, silver, and monetary funds, whether in the bank or in cash, is 2.5%. So, back to the $5,000 example: $125 would be due in zakat from that money. And yes, I totally had to check that in my zakat calculator to make sure I did the math right.

Once you have your math double-checked, it is time to figure out who to give the money to. I have found this to be slightly tricky living in the West, as most of the people I know are either non-Muslim (whom you can only give to if there is a chance of them embracing Islam, or if there are no Muslims in need in your area), or are paying zakat themselves and as such, cannot take it.

There are a few different categories of people that zakat can be given out to:

  • The poor and needy within the Muslim community
  • Those who collect/keep the records of the zakat funds, in the case they have no salary
  • Those who are hoped to enter Islam or be softened towards it by the reception of zakat funds, or those new Muslims who have already embraced Islam and need support and resources to keep them steady
  • Those in debt and unable to pay it off
  • Those who fight in the cause of Allah (only in the case of a real, sanctioned, legitimate fight)
  • Travellers who are running short of funds

You can pay zakat to someone from one category, or distribute it between the categories if it is a large amount. It is even better to be able to give it to a needy relative (not your dependants), as you are not only giving your zakat in an act of charity, but you are also upholding family ties, which is a highly rewarded act in Islam.

The issue for me has always been to find these kinds of people. Here in Algeria, it is much simpler to find a needy brother or sister, or even to help one’s relatives. In the United States, however, it can be much more difficult. What I would recommend in that case, is to give your zakat to the local mosque to distribute, though you do need to make it clear that it is zakat to be given to people in one of these categories, and not general charity.

Another thing I would like to clarify is zakal al-fitr. This is different from your annual zakat that needs to be paid. It is due at the end of the month of Ramadan, preferably before the day of Eid so that it can be distributed before the celebration. Zakat al-fitr is obligatory for every Muslim who has an excess of 2.5 kg of food over their needs and the needs of their family, and it must be given for every member in the household.

Many mosques in the United States and United Kingdom have a special box out during Ramadan for zakat al-fitr, and they will usually have the amount posted somewhere visible. I believe my first Ramadan the amount in my area was around $10 per person, so completely affordable even for a student with two jobs!

Ok, this post has gone on long enough, and I do hope it has been a good introduction to the topic and importance of zakat, and the basics on how it is done. I also hope it has inspired you to go do some more research, and start tracking your finances for the purpose of nisab!

Everyone, please do correct me if my numbers are off, and also let me know if you like articles like this one, and I will keep trying to do my research and write on these kinds of topics!



7 thoughts on “Let’s Talk Money: Zakat

  1. It’s basically the amaunt that differentiates whether you rich or poor. If you have it’s amount or more, you hve to pay Zakaat and if you have less, you don’t pay Zakaat and Zakaat can be give to you.

    To determine the amount of nisaab, you should first workout the is cash value of 612.36 grams of Silver (nisaab for silver), and the cash value of 87.48 grams of gold (which is the fixed nisaab for gold. The one that’s lessor will be the nisaab for Zakaat.

    Example: (this is just an example, the amounts are not accurate):
    87.48g of gold = $ 400
    612.36g of silver = $ 350
    $350 dollars is cheaper so that is the nisaab

    Currently 612.36g of silver is worth less so that’s the nisaab, the cash amount of which is currently $ 357.71.

    If you are not into math it may be a little boggling so maybe you can just ask a learned Muslim from your community or use a calculater as the Sister has explained

    Hope this explains it.

    Liked by 1 person

  2. Pingback: Ramadan Resources Roundup – Muslimah According to Me

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