Zakat FAQs

Zakat Frequently Asked Questions

The most common questions about Zakat have been compiled by Hidaya Foundation. Please feel free to read, print and distribute this resource.

Note: For any zakat related questions, you may email us at: zakat@hidaya.org

1. What is Zakat?
2. What is the meaning of Zakat?
3. What kind of wealth/assets requires paying zakat on them?
4. What are zakatable wealth/assets?
5. What are zakatable asset’s liabilities and can those be deducted while calculating zakat?
6. What are non-zakatable wealth/assets?
7. What are non-zakatable liabilities and can those be deducted while calculating zakat?
8. What is Nisab?
9. What is the amount of wealth/assets where zakat becomes liable?
10. How long do I have to have nisab where zakat becomes liable?
11. What is the rate of zakat which was fixed by the Prophet (pbuh)?
12. How do I calculate my zakat for all different kinds of assets that I have?
13. Is it necessary to give zakat in Ramadan only?
14. Who is entitled to receive Zakat?
15. Who cannot be given Zakat?

1. What is Zakat?

Zakat is an important pillar among the five pillars of Islam.
It is an obligatory act ordained by Allah (The Glorified and Exalted) to be performed by every adult and able bodied Muslim.
It is levied on specific assets only, identified by Shariah (Islamic Law) as assets having the potential for growth.
It is a part of the wealth and property that Muslims must pay annually, to help the poor of their community.
It is levied at the rate of 2.5% each year (calculated according to the lunar calendar) on the market value of the Zakat-able assets after deducting there from specified liabilities.
The compulsory transfer of ownership of a portion of the property of the giver, calculated at the rate of 2.5% as aforesaid, to a poor and needy Muslim who qualifies to receive Zakat according to the Shariah.
It is an Ibada’h (worship) and not a tax, Obligatory on every Muslim who owns Nisab viz. 613.35 grams of silver, or 87.49 grams of gold or who owns one or more assets liable to Zakat, equal in value to 613.35 grams of silver or 87.49 grams of gold.

2. What is the meaning of Zakat?

Zakat literally means “to be clear, to grow, to increase.” It comes from the root letters za, kaf, ya, which has several meanings: to be clean, to pay the obligatory charity, to be pure, innocent, to be better in purity, and to praise oneself, to justify. It has been used in the Quran to mean all of these things. It can also be considered a form of sadaqah (charity), given to the poor.

3. What kind of wealth/assets requires paying zakat on them?

The wealth/assets which are productive in nature from which profit or benefit can be acquired requires paying zakat on them.

4. What are zakatable wealth/assets?

Business merchandise, gold, silver, cash, stocks, mutual funds, stock options, 401k-IRA, livestock, buried precious metals or minerals, or agricultural produce are zakatable wealth/assets.

5. What are zakatable asset’s liabilities and can those be deducted while calculating zakat?

The assets which are zakatable and the person owe some amount on those assets are the liabilities on zakatable assets and can be deducted from total zakatable amount, while calculating zakat. For example you bought some gold for (e.g. for $10,000) and have not paid fully to the jeweler and you owe $2000. At the time of calculation, zakatable wealth/assets will be $10000 – $2000 = $8000

6. What are non-zakatable wealth/assets?

Items of personal use such as clothing, food, shelter or house one lives in, cars, money that does not reach the amount of nisab, any property that is not used for business etc are non-zakatable wealth/assets.

7. What are non-zakatable liabilities and can those be deducted while calculating zakat?

Any liabilities or loans you owe on non zakatable assets such as house loan or mortgages are non-zakatable liabilities. Considering you do not pay zakat on non zakatable assets, hence you cannot deduct such liabilities during zakat calculation. For example you can not deduct your mortgage from zakatable wealth/assets because you do not pay zakat on your house.

8. What is Nisab?

The amount of zakatable wealth/asset which makes one liable for paying zakat is called Nisab. In other words any person who has Nisab in his possession for one lunar calendar has an obligation to pay Zakat. Similarly if a person does not have Nisab in his possession he/she can take Zakat.

9. What is the amount of wealth/assets where zakat becomes liable?

The prophet (pbuh) fixed the nisab of gold and silver which are 87.49 grams of gold or 613.35 of silver. The value of these 87.49 grams of gold and 613.35 might have been the same at the time of the prophet (pbuh). The value of both metals change daily in the markets. On June 30, 2010 the nisab of gold at the rate of ($40.00 per gram x 87.49) was $3499.60 and the nisab of silver at the rate of ($0.60 per gram x 613.35) was $368.01. To benefit the poor, scholars consider the nisab which ever is less between gold and silver. At present nisab of silver is less, hence whoever has $368.01 for a full year is liable to pay zakat.

10. How long do I have to have nisab where zakat becomes liable?

A person has to have nisab for at least one year after which zakat becomes liable.

11. What is the rate of zakat which was fixed by the Prophet (pbuh)?

If wealth is above nisab over one year, the prophet (pbuh) fixed the rate of zakat which is 2.5% or (1/40) which is $2.50 on every $100.

12. How do I calculate my zakat for all different kinds of assets that I have?

All the values of zakatable assets are converted into cash and if it stayed above the nisab of silver for one year, 2.5% or 1/40th of that wealth/assets is given as zakat.

13. Is it necessary to give zakat in Ramadan only?

When a person’s wealth reaches above nisab he or she must right it down that date. It might be any time during the lunar calendar. Once 12 lunar calendar months has passed zakat is due whether it is Ramadan or not. If there is a situation where a persons wealth/assets go below the nisab, zakat will only be due when wealth/assets reach the value of nisab and stay above it for one year.

14. Who is entitled to receive Zakat?

There are eight groups of people on whom Zakat should be spent, as mentioned in the Quran: “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]

Fuqaraa: Those who own property in excess of basic necessities but below the value of Nisab.
Masakeen: Persons of extreme poverty who possess no wealth whatsoever.
Aamileen: (Zakat collector) Those persons who are appointed by an Islamic Head of State or Government to collect Zakat. It is not necessary that this be a needy person.
Muallafatul Quloob: Those poor and needy persons who are given Zakat with the intentions of solidifying their hearts because they maybe recently converted to Islam or to bring them closer to Islam.
Ar-Riqaab: slaves whose masters have agreed to set them free on a payment of a fixed amount. Zakat may be used to purchase their freedom.
Ibnus-Sabeel: A traveler, who, whilst wealthy at his residence, is stranded and in need of financial assistance.
Al Ghaarimeen: A person whose debt exceeds his assets and his net assets (after deducting his liabilities) is below the Nisab limit. To determine whether a qualifies, his basic necessities of life (house, furniture, clothes, vehicle, etc.) will not be taken into account. It is conditional that the debts were not created for any un-Islamic or sinful purpose.
Fi Sabeelillah: Those who are away from home in the path of Allah. Those in Jihaad, those seeking knowledge or a stranded Haji may be assist with Zakat if they are in need.

15. Who cannot be given Zakat?

Zakat cannot be given to parents, grandfather, etc., or to one’s children and grandchildren. A husband and wife cannot give Zakat to each other.
Zakat contributions cannot be given to such institutions or organizations who do not give the rightful recipients (Masaarif) possession of Zakat, but instead use Zakat funds for construction, investment or salaries.
Zakat cannot be given to non-Muslims. The same ruling applies to Waajib Sadaqah (charity), i.e., Sadaqatul Fitr, Kaffarah, Ush’r and Naz’r. Naf’l Sadaqah could be given to non-Muslims.
If one cannot determine whether the recipient is needy or not, then it is better to make certain before giving him Zakat. If Zakat is given without inquiry and subsequently it is known that the recipient is wealthy the Zakat is not valid. It has to be given again.
Zakat will not be fulfilled by purchasing books for an institution, or land purchased for public utility and made Wak’f.
Zakat cannot be used for the Kaf’n of a deceased person who has no heirs, because at that time he/she cannot become the owner.
A dead person’s debt cannot be paid from Zakat.