How to calculate the Zakat

Fatwa ID: 02523

Answered by: Maulana Muhammad Afzal Hussain

Question:

Can anyone please explain how a Muslim should calculate Zakat, he is bound to pay? Please include all the factors, say, property, gold, income/salary etc?

Answer

Zakat, the giving of alms to the poor and needy, is one of the five pillars of Islam (Bukhari :8 Muslim:16)

The author of Al-Hidayah said: ‘Zakat is obligatory for each free, sane and major Muslim when he owns the nisaab (minimum scale) through complete ownership and a year has passed over such ownership.’ [Al-Hidayah, Vol: 1, Chapter: The Obligation of Zakat]

The individual must own a specific amount of wealth or savings (after living costs, expenses etc). This is referred to as Nisaab and is the threshold at which Zakat becomes payable. The amount of Zakat to be paid is 2.5% of Nisaab.

Allah said: "The alms are only for the Fuqara' (the poor), and Al-Masakin (the needy) and those employed to collect (the funds); and 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, and for the wayfarer (a traveler who is cut off from everything); a duty imposed by Allah. And Allah is All-Knower, All-Wise." [Al-Quran 9:60]

"They ask you as to what they should spend. Say: Whatever wealth you spend, it is for the parents and the near of kin and the orphans and the needy and the wayfarer, and whatever good you do, Allah surely knows it." [Al-Quran 2:215]

Zakat Calculation

Step 1: work out what you own

Cash in hand £

Cash in bank accounts £

Value of gold (current market value) £

Value of silver (current market value) £

Amount given out in loans (where the debtor is able and

willing to pay back the loan) £

Current value of shares £

Value of goods (property/ cars/ any business products and items) in stock for sale £

Total assets £

Step 2: work out your outgoings from what you own

Amount owed in debt (short term loans or those payable

within a year) £

Expenses (Tax, rent and other bills due immediately) £

Total liabilities £

Step 3: Minus Total Liabilities from Total Assets and if the amount is more than the Nisaab then multiply by 0.025

Total Assets £

Total Liabilities £

Total Zakat £

Only Allah Knows Best

Written by Maulana Muhammad Afzal Hussain   

Checked and approved by Mufti Mohammed Tosir Miah

Darul Ifta Birmingham

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