Zakat

What is Zakat?

Zakat (poor-due) is the third pillar of Islam. It is obligatory but only for those Muslim men and women who possess wealth above a certain limit. The word zakat means to purify. It purifies and protects our soul from miserliness, selfishness, and greed, and purifies our wealth from the evils of this world.

It is a form of worship (ibadah) in terms of wealth. Zakat cleanses your soul, purifies and grows your wealth, and is a socio-religious tool to help eradicate poverty in a community or society. Zakat is also a spiritual bridge and connection to Allah to purify your wealth for the will of Allah and to His cause is to acknowledge that everything one owns belongs to Him, and it is for Him that we strive to end poverty.

How does zakat work?

There are four simple steps to working out your zakat:

Work out what you own.
Then take off what you owe.
Work out the balance and check that it is more than the Nisab value.
Work out 2.5% of that and there you go, you have got your zakat amount.

Since the payment of zakat is an act of worship, its validity depends upon the expression of one’s intention. That is, the zakat payer should pay it for the sake of Allah; he should make up his mind, with all of his heart that zakat is an obligation to be discharged.

What is nisab and its current value?

Nisab is the minimum amount that a Muslim must have before being obliged to zakat. The Nisab was set by Prophet Muhammad (SAW) at a rate equivalent to 87.48 grams of gold and 612.36 grams of silver

As we no longer use gold or silver as currency, you need to find out the equivalent monetary exchange value of the rates the Prophet Muhammad (SAW) set in your local currency. You can do this by checking the market rate of gold and silver. The two values used to calculate the Nisab threshold are gold and silver.

When is the zakat due date?

Zakat is payable if you have completed the Haul which is a period of 1 Hijri year (355 days). For first-timers, your Haul period begins when your savings account first meets the Nisab. For recurring zakat payers, the Haul period begins from the last zakat payment date.