Zakat
A Pillar of Islamic Charity
Zakat, one of the Five Pillars of Islam, is a form of almsgiving and social responsibility deeply ingrained in the Islamic faith. This means that Zakat is mandatory for Muslims, along with the other four sacred pillars of prayer (salah), fasting (sawm), pilgrimage (Hajj) and belief in Allah and His Messenger, Prophet Muhammad (peace be upon him) (shahadah).
Purpose of Zakat
The primary purpose of Zakat is multifaceted. It purifies the giver’s wealth, ensuring social equality and justice. Additionally, Zakat aims to alleviate the financial burden of those less fortunate, promoting a sense of community and shared responsibility. The beneficiaries include the poor, orphans, widows, prisoners, and those in debt, among others.
How Zakat works
To make sure Zakat achieves its purpose and is used in the right way to help those who should be receiving it, Zakat needs to be administered properly. In this section, you can find out more about how Zakat works to change the lives of Muslims as individuals positively and to create a thriving, closer Muslim community.
What Are the Rules of Zakat?
Individuals must meet a certain threshold known as nisab to qualify for zakat every lunar year. This is set at 87.48 grams of gold or 612.36 grams of silver. People whose wealth exceeds the value of these amounts must pay 2.5% of their wealth in zakat. Individuals who do not meet this limit are not obligated to pay.
Zakat vs. Nisab
Nisab is a term that often appears alongside zakat. It is a threshold, referring to the minimum wealth and possessions a Muslim must own before being obligated to pay zakat. In other words, if personal wealth is below this minimum during one lunar year, no zakat is owed for that period. The nisab is set at 87.48 grams of gold or 612.36 grams of silver.
Not everyone pays zakat at the same time. That’s where nisab comes into play. Individuals become eligible to pay zakat once they reach the threshold during the full lunar year. So, one individual may owe it earlier than someone else.
There is no set payment date for zakat. But it is often paid out at the end of the year once calculations on any leftover wealth are made. Some Muslims believe that paying zakat during Ramadan brings good fortune.
This requires that individuals take regular inventory of their possessions and wealth. This can be done either weekly or monthly.
FREQUENTLY ASKED QUESTIONS
Zakat is the third pillar of Islam and denotes the amount of wealth a Muslim must pay to certain groups of underprivileged people.
Zakat is neither a tax nor a charity but a compulsory worship act stipulated by Allah (SWT). Zakat is intended to purify our wealth, not only physically but also spiritually. It purifies our hearts against selfishness and ensures that society’s poorest are protected against hunger and destitution.
The value of Zakat is 2.5% of your personal excess wealth. This means that if your excess wealth comes to a value of £1,000, your Zakat payment would be £25.
Muslims past puberty and of sound mind are eligible to pay Zakat as long as they meet the required Nisab threshold.
To be eligible to pay Zakat, your level of excess wealth must remain higher than the Nisab value for a full year. This is when your Zakat payment will be due.
The easiest way to work out your Zakat is to use a Zakat calculator to ensure you pay the correct amount.
The calculator allows you to input the total value of your cash savings, gold and silver and any business assets you may own, as well as consider any unpaid debts you may have.
Your Zakat payment is a compulsory worship act, including Zakat on Gold.
Therefore, you need to pay 2.5% of the value of the Gold you own.
The Nisab - the minimum value of wealth one must possess for Zakat to become payable - is defined as: