Office for Students

A Complete Guide to Paying Zakat in Islam

Introduction: Why Zakat Matters

Zakat is not merely an act of charity; it is a divine obligation and one of the five pillars of Islam. It serves as a means of spiritual purification, ensuring that wealth is distributed equitably among the needy and preventing greed and materialism from corrupting the heart. Allah commands in the Quran:

“Take from their wealth a charity by which you purify them and cause them to increase, and invoke [Allah’s blessings] upon them. Indeed, your invocations are reassurance for them. And Allah is Hearing and Knowing.“
(Surah At-Tawbah, 9:103)

Zakat is a right of the poor over the wealth of the rich, and neglecting it is a serious sin. The Prophet ﷺ warned:

“The wealth of a man who does not pay Zakat will appear to him on the Day of Judgment as a huge, poisonous snake with two black spots over its eyes. It will coil around his neck and bite his cheeks, saying: ‘I am your wealth, I am your treasure.’“
(Bukhari, Muslim)

Understanding and fulfilling Zakat correctly ensures that our wealth is blessed and that we uphold one of the most important acts of worship in Islam.

Ready to pay?

Who Must Pay Zakat?

Zakat is obligatory on every Muslim adult who possesses wealth above the Nisab threshold (the minimum amount of wealth required for Zakat to be due). The conditions for Zakat to be obligatory are:

  1. Muslim: Zakat is only required from Muslims.
  2. Adult (Baligh): A person must have reached puberty.
  3. Sane: A person must be of sound mind.
  4. Possessing Wealth Above the Nisab: The wealth must exceed the Nisab after meeting basic needs.
  5. One Lunar Year Must Pass: The wealth must be in possession for a full Islamic year (Hawl).

What Type of Wealth is Zakat Payable On?

Zakat is not required on all wealth. It is payable only on specific categories of wealth:

1. Gold & Silver

  • Gold: Zakat is due on gold jewelry, coins, and bullion.
  • Silver: All silver holdings (including jewelry, coins, and utensils) are Zakatable.

Nisab for Gold: 87.48 grams (~7.5 tolas or 3 ounces).
Nisab for Silver: 612.36 grams (~21 ounces).

2. Cash & Savings

  • Cash at home, in bank accounts, or in business transactions is Zakatable.
  • Includes savings, fixed deposits, pensions, and cryptocurrency (if cashable).

 3. Business Assets

  • Trade goods (items bought to sell).
  • Stock in trade (e.g., retail inventory, merchandise).
  • Investments made for resale.

4. Investments

  • Stocks & Shares: If bought for trading, Zakat is paid on the full value. If for dividends, Zakat is on cash returns.
  • Real Estate: If bought for resale, Zakat is due on market value. If rented out, Zakat is on rental income, not the property itself.

5. Livestock & Agricultural Produce

  • Zakat applies to grazing animals like camels, cows, sheep, and goats.
  • Agricultural produce has a different Zakat rate (10% on rain-fed crops, 5% on irrigated crops).

Who is Eligible to Receive Zakat?

Allah lists eight categories of people who can receive Zakat:

“Zakat is for the poor, the needy, those employed to administer it, those whose hearts are to be reconciled, for freeing captives, for those in debt, for the cause of Allah, and for the stranded traveler. An obligation from Allah, and Allah is Knowing and Wise.“
(Surah At-Tawbah 9:60)

Eligible Recipients of Zakat:

  1. The Poor (Faqir): Those who have less than the Nisab amount.
  2. The Needy (Miskeen): Those who have no income and are struggling to survive.
  3. Zakat Administrators: Those employed to collect and distribute Zakat.
  4. New Muslims (Mu’allafah Qulubuhum): Those whose hearts are inclined to Islam.
  5. Freeing Slaves & Prisoners: Helping captives or those enslaved.
  6. Debtors (Gharimeen): Those who cannot repay their Shariah-compliant debts.
  7. For the Cause of Allah (Fi Sabilillah): Islamic educational efforts, Da’wah, Jihad, and relief efforts.
  8. Stranded Travelers (Ibn Sabeel): Those who are stranded and need assistance.

Who Cannot Receive Zakat?

  • Parents, grandparents, children, and spouses of the one giving Zakat.
  • Wealthy individuals who possess more than Nisab.
  • Non-Muslims (except in cases of Mu’allafah Qulubuhum).

How to Calculate Zakat?

Zakat is 2.5% of your total Zakatable wealth if it remains above the Nisab threshold for a full Islamic year.

Formula to Calculate Zakat:

(Total Zakatable Wealth – Liabilities) × 2.5% = Zakat Due

Example Calculation

Let’s assume you own:

  • Cash savings = £5,000
  • Gold (100g, market price: £50 per gram) = £5,000
  • Business inventory = £2,000

Total Zakatable Assets = £5,000 + £5,000 + £2,000 = £12,000
If the Nisab is £450 (silver-based), you must pay Zakat.

Zakat = £12,000 × 2.5% = £300

When Should Zakat Be Paid?

  • Zakat is due once your wealth has remained above Nisab for one full lunar year.
  • Ramadan is a popular time to pay Zakat because rewards are multiplied, but it can be paid anytime in the year.
  • Delaying Zakat unnecessarily is sinful.

The Consequences of Not Paying Zakat

The Prophet ﷺ said:

“Whoever is made wealthy by Allah and does not pay the Zakat of his wealth, then on the Day of Resurrection, his wealth will be made like a bald-headed, poisonous snake with two black spots over its eyes. It will encircle his neck and bite his cheeks, saying, ‘I am your wealth, I am your treasure.’“
(Bukhari, Muslim)

Neglecting Zakat leads to:

  1. Punishment in the Hereafter
  2. Loss of blessings (Barakah) in wealth
  3. Hardness of heart

Paying Zakat ensures:

  1. Purification of wealth
  2. Blessings and growth in Rizq
  3. A means of securing Allah’s mercy

Frequently Asked Questions (FAQs)

  1. Should I pay Zakat on my salary?
    If salary savings exceed Nisab and remain for a year, Zakat is due on them.
  2. Should I pay Zakat on a house I live in?
    No, Zakat is not due on personal homes.
  3. What if I miss paying Zakat in past years?
    You must calculate and pay missed Zakat for each year.
  4. Can I pay Zakat to my relatives?
    Yes, but not to parents, children, or spouses.
  5. Can Zakat be given in secret?
    Yes, and it is better if done quietly to maintain sincerity.

Conclusion: Give Zakat, Purify Your Wealth

Zakat is an investment in the Akhirah. It is a means of purifying our wealth, drawing closer to Allah, and supporting those in need. Allah says:

“And establish prayer and give Zakat, and whatever good you send forth for yourselves, you shall find it with Allah.“
(Surah Al-Baqarah 2:110)

Fulfill this duty with sincerity, and may Allah bless and multiply your wealth. Āmīn.

References & Further Reading

  1. Quran, Surah At-Tawbah (9:60, 9:103)
  2. Ṣaḥīḥ al-Bukhārī, Ṣaḥīḥ Muslim
  3. Classical Fiqh Texts: Al-Hidāyah, Fatḥ al-Qadīr

Disclaimer: This guide is a simplified overview of Zakat according to Islamic teachings. For specific rulings or personal circumstances, consult qualified scholars. May Allah guide us to fulfill this obligation with sincerity and excellence.

coins

Pay Your Zakat

We send 100% of your zakat to the eligible poor.

Data Not Found

Thanks For Subscribe!