Zakat
What Is Zakat?
Zakat, also known as “charity” or “alms-giving,” is a mandatory form of giving back to the community for Muslims. The word “zakat” means “to purify” and it is considered a form of purifying one’s wealth by giving a portion of it to those in need.
“…and those in whose wealth there is a recognised right, for the needy and deprived” (Qur’an 70:24-5)
One of the most commonly asked questions about Zakat is whether it can be given as a donation. The answer is yes, Zakat can be given as a donation, but it is important to note that it is a mandatory obligation for Muslims and not just a voluntary act of charity.
What are the 3 conditions of zakat?
There are three conditions that must be met for Zakat to be considered valid. First, the person giving Zakat must be a Muslim. Second, the wealth that is being given as Zakat must meet a certain threshold, known as the Nisab. And third, the wealth must be owned for a full lunar year before Zakat is due.
When Is Zakat Mandatory?
The nisab, or the threshold at which Zakat becomes mandatory, is currently set at 85 grams of gold or 595 grams of silver. For cash and other forms of wealth, the nisab is determined by the current market value. Once the nisab is met, 2.5% of that wealth must be given as Zakat. This means that if a person’s wealth is worth $10,000, they would be liable to pay $250 in Zakat.
Who are the 8 Recipients of Zakat?
There are eight categories of people who are eligible to receive Zakat, known as the “ash-shabaab al-arham” (the eight most deserving of Zakat).
- These include the poor, the needy, those working to collect Zakat, those whose hearts need to be reconciled, those in slavery, those in debt, those traveling in the cause of Allah, and those in the way of Allah.
- If a person owes several years of Zakat, they can pay it all at once or make a plan to pay it off over time. It is important to note that paying Zakat late does not absolve the person of their obligation and they may still be liable for any penalties.
- Eligible recipients of Zakat are those who are in need and cannot support themselves, regardless of their religion or nationality. This includes the poor, the needy, and those working to collect Zakat.
- Zakat is due in the Islamic month of Ramadan, but it can be given at any time throughout the year. Many Muslims choose to pay Zakat every month, but it is not mandatory.
- Zakat is due on all forms of wealth, including salary. This means that if a person’s salary meets the nisab threshold, they must give 2.5% of it as Zakat. There are several ways to pay Zakat, including giving it directly to eligible recipients, giving it to a Zakat collector, or donating it to a reputable Zakat organization like JDC because it is important for you to ensure that your Zakat is being distributed to those in need in a timely manner.
The Many Benefits of Giving Zakat: A Fulfilling Act of Charity
Charity in the name of Allah, through the act of giving zakat, can have significant positive impacts on both the individual performing the charitable act and the society they reside in.
These benefits include:
- Unification in the cause of Allah, with an angel praying for those who donate for divine purposes.
- Zakat also serves as a means of protection from hellfire for those who obey Allah with complete faith.
- Additionally, the act of donation promotes a sense of belongingness within society by promoting balanced wealth distribution and uplifting the poor and needy, thereby reducing social differences and fostering equality amongst individuals as intended by Allah.
Zakat Criteria and Considerations
Zakat is an important obligation in Islam, but not everyone is required to pay it. Here are some pointers to help you determine if Zakat is mandatory for you:
Basic Conditions for Zakat:
Zakat is mandatory for Muslim adults who are of sound mind and own the minimum amount of Zakatable wealth (Nisab) for at least one lunar year.
Zakat for Minors
- Some schools of thought suggest that Zakat is also due for minors with wealth or inheritance who meet specific conditions.
- This does not apply to children’s allowances or Eid money, but rather to minors with trust funds and inheritances.
- Consult with your local scholar for further details on this topic.
Allah (swt) does not burden a soul with more than it can bear, and the rules for Zakat are straightforward. By understanding the criteria and considerations for Zakat obligation, we can fulfill our religious obligations and serve society.
Understanding Zakat: Calculation and Its Impact
Zakat is a form of charity in Islam that has many benefits for individuals and society. Here are some pointers to calculate zakat and understand the facts:
Zakat is not just an annual obligation, but a powerful tool for uplifting and serving the needy. Its significance is emphasized in the Quran, where it’s mentioned over 30 times and linked with prayer. By paying Zakat, we demonstrate our commitment to inner refinement and public service.
How Zakat Changes Lives
- The primary purpose of Zakat is to assist the poor, needy, and disadvantaged by ensuring their basic needs are met.
- At JDC, we focus on distributing Zakat in a way that empowers people to break the cycle of poverty and achieve financial independence.
Who Needs to Pay Zakat
- Zakat is mandatory for Muslim adults of sound mind who own a minimum amount of Zakatable wealth (Nisab) for at least one lunar year.
- Minors with trust funds or inheritances may also be obligated to pay Zakat, subject to certain conditions.
Calculating Zakat
- Zakat is calculated based on total income minus immediate needs and living expenses, subject to the Nisab threshold.
- The Zakat amount is calculated as 2.5% of the Zakatable wealth.
- JDC’s Online Zakat Calculator can simplify the calculation process.
- By understanding the fundamental principles of Zakat and its calculation, we can make a meaningful impact on society and contribute to the fulfillment of our religious obligations.
- To calculate Zakat, first, one must determine the Zakatable income, which includes all sources of income such as gold, silver, cash, stocks, and property.
- After adding all sources of income, one must calculate their annual living expenses and deduct them from the total income to find the total Zakatable amount.
- If the Zakatable amount is above the threshold or nisab, the individual should donate the calculated Zakat percentage of the Zakatable wealth.
Calculating Zakat on Salary
- Zakat on salary is calculated based on the savings from the salary.
- If the savings exceed nisab, then the individual is obligated to pay Zakat.
- In the case of irregular salary, one can calculate the total savings of the year and donate accordingly.
Zakat Facts
- Only those who hold wealth for a complete year are eligible to donate Zakat.
- It is the right of every poor to receive Zakat as ordered by Allah.
- The main intention of Zakat is to make the poor self-reliant and provide equal status next to the rich.
- Zakat is second only to the five daily prayers when talking about the five pillars of Islam.
- Zakat calculations must be done in a specific manner and not at the individual’s discretion.
- People should prioritize their neighborhoods for charity.
Donate/Pay Zakat to JDC
- At JDC, we understand the importance of giving back to the community and we make it easy for you to donate your Zakat. We are a not-for-profit organization that is dedicated to providing Zakat services to our people. We work tirelessly to ensure that your Zakat reaches the deserving people, who are in dire need of your support.
- By giving your Zakat to JDC, you can rest assured that your money will be used to support those in need and make a real difference in the lives of those around you. We have a team of experienced and dedicated professionals who are committed to ensuring that your Zakat reaches the right people, in the right way.
- Donating zakat to JDC is easy, you can make a Zakat donation online, by phone, or by visiting our office. Our team will help you to calculate your Zakat and provide you with all the necessary information about our Zakat policy.
- So, if you want to make a difference in our country, give your Zakat today by donating to JDC. Your support will help us to continue our work of helping those in need and making a positive impact on the lives of those around us.
Zakat is an Islamic financial concept that mandates individuals to annually contribute a portion of their wealth to charitable purposes. This obligatory practice is considered a form of worship and is compulsory for most Muslims across nations. By donating excess earnings to the less fortunate, Zakat serves to cleanse yearly income beyond necessary sustenance for oneself and family.
To qualify for Zakat, the recipient should be impoverished or in need. Poverty is defined as not meeting the Nisab threshold due to excess property beyond essential needs. Zakat cannot be given to immediate family members—spouse, children, parents, and grandparents—but can be given to other relatives.
The wealthy, except those involved in the Zakat administration:
- Able-bodied poor individuals who have the capacity to work but refuse to do so.
- Those who are heretical, apostates, or anyone who actively participates against Islamic beliefs.
- Spouses and descendants cannot be recipients of Zakat.
There are 2 main types of Zakat: Zakat ul Mal and Zakat ul Fitr. Zakat ul Mal means ‘Zakat over one’s wealth,’ which is a small portion of wealth given to the poor for their financial needs. Zakat ul Fitr, also known as ‘Fitrana,’ is obligatory for all Muslims, with enough food for a day, irrespective of age or financial standing.
Zakat amounts to 2.5% (or 1/40) of a Muslim’s total wealth, exceeding the Nisab threshold. It is calculated and paid annually.
Zakat is payable at a rate of 2.5% on all cash and bank balances, including savings, current, or fixed deposit accounts. The amount should remain in the bank for a year.
Zakat is calculated at 2.5% of the market value on the Lunar valuation date. The prevailing market value during the calculation date is favored over the purchase price by most scholars.
