The tax you pay in charity
Zakah, the giving of alms to the poor and needy, is one of the five pillars of Islam (the others are declaration of faith, prayer, fasting in Ramadan and Hajj). It is obligatory upon every adult Muslim of sound mind and means.
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 Zakah becomes payable. The amount of Zakah to be paid is 2.5% of Nisaab .
“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]
“(Alms are) for the poor who are confined in the way of Allah– they cannot go about in the land; the ignorant man thinks them to be rich on account of (their) abstaining (from begging); you can recognize them by their mark; they do not beg from men importunately; and whatever good thing you spend, surely Allah knows it.” [Al-Quran 2:273]
Zakah is not charity, It is not voluntary charity not a tax but an obligation. By giving Zakah, a Muslim is acknowledging that everything we have is Allah’s and we do not really own it, and we should use it to remember Allah and help those who are in need. It is also an act to help free us from excessive desire and greed, learn self-discipline and honesty.
You should record the Islamic date on which you first became the owner of Nisaab – if, on the same date the following lunar year, you are still the owner of Nisaab, you will be obliged to pay Zakah. Many Muslims choose to give it during Ramadan as the rewards for good deeds performed in Ramadan are greater than in any other month.
Zakah can only be paid to specific beneficiaries and projects.
The Qur’an mentions eight groups of people on who Zakah should be spent:
(Surat At-Tawbah 9:60)
- The Fuqara’ (the poor)
- Al-Maskin (the needy)
- Aamileen (Zakah collector)
- Muallafatul Quloob (poor and needy who recently converted to Islam)
- Ar-Riqaab (slaves; Zakah can be used to purchase their freedom)
- Ibnus-Sabeel: A stranded traveller in need of financial assistance.
- Al Ghaarimeen: A debtor
- Fi Sabeelillah: Those who are away from home in the path of Allah
Assets to include in your Zakah calculation are cash (in hand, in bank accounts or money lent to someone), shares, pensions, gold and silver. Personal items (your home, furniture, cars, food, clothing) are not included in Nisaab.
There are two measures to determine Nisaab – gold (3 ounces or 87.48 grams, or its cash equivalent) or silver (21 ounces or 612.36 grams, or its cash equivalent).
On today’s price of gold per gram of £30.70, the nisaab is £2,685.63
Based on today’s price of silver per gram of £0.38, the nisaab is £232.70
Have you tried our Zakah Calculator?
While it is permissible to use either gold or silver to calculate Nisaab, many scholars recommend using silver as more people paying Zakah means more of the poor and needy benefit.
Gold: For example, if the price of gold is £20 a gram, the Nisaab (£20 x 87.48) on which Zakah is due is £1,749. So anyone who has £1,749 or more in savings will have to pay 2.5% Zakah on that (minimum Zakah will be £43.73).
Silver: For example, if the price of silver is £1 a gram, the Nisaab (£1 x 612.36) on which Zakah is due is £612.36. So anyone who has £612.36 or more in savings will have to pay 2.5% Zakah on that (minimum Zakah will be £15.31).
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