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1. What is Zakat?  

Zakat / Zakah is a  religious obligation of alms-giving on a Muslim to pay 2.5% of certain kinds of his wealth annually to one of the eight categories of needy Muslims. Literally, it means blessing, purification, increase, or cultivation of good deeds. In Sharia, it is an obligation to pay Zakat on wealth above a specified minimum for defined beneficiaries, as noted in the Quran.

2. What is the purpose of Zakat? 

To purify one’s wealth, to create a balance in society and to allow a social harmony between the wealthy and the needy.

  • “Take, [O, Muhammad], from their wealth a charity by which you purify them and cause them increase, and invoke [ Allah ‘s blessings] upon them. Indeed, your invocations are reassurance for them. And Allah is Hearing and Knowing.” Quran 9:103 
  • And abide in your houses and do not display yourselves as [was] the display of the former times of ignorance. And establish prayer and give zakah and obey Allah and His Messenger. Allah intends only to remove from you the impurity [of sin], O people of the [Prophet’s] household, and to purify you with [extensive] purification.” Quran 33:33
  • And We made them leaders guiding by Our command. And We inspired to them the doing of good deeds, establishment of prayer, and giving of zakah; and they were worshippers of Us.” Quran 21:73
  • And establish prayer and give zakah, and whatever good you put forward for yourselves – you will find it with Allah. Indeed, Allah of what you do, is Seeing.” Quran 2:110

3. Who should pay Zakat?

Every free, sane, and adult Muslim who has exceeded the Nisab has the obligation to pay Zakat. The Nisab is a minimum owned amount of wealth held during one Hawl (one lunar year). The wealth could be money, shares, commodities…equal to or exceeding an equivalent value of 85 g of gold. 

  • And establish prayer and give zakah and bow with those who bow [in worship and obedience].” Quran 2:43
  • Those who do not give zakah, and in the Hereafter they are disbelievers.” Quran 47:7

4. Who should I give the Zakat money to?

Zakat can be given to eight different Asnaf (categories) of needy Muslims: 

  • Fakir (the poor): Muslim with neither material possessions nor means of livelihood. 
  • Miskin (the needy): Muslim with not enough means of livelihood.
  • Amil: Zakat collector (employee).
  • Muallaf: New Muslim convert.
  • Riqab: Muslim freeing him/herself from slavery or captivity.
  • Gharimin: Indepted Muslim who has difficulties of repayment.
  • Fisabillah: Striver in cause of God. 
  • Ibnussabil:Traveller in difficulties.
  • “Zakah expenditures are only for the poor and for the needy and for those employed to collect [zakah] and for bringing hearts together [for Islam] and for freeing captives [or slaves] and for those in debt and for the cause of Allah and for the [stranded] traveler – an obligation [imposed] by Allah . And Allah is Knowing and Wise.” Quran 9:60

5. How do we calculate Zakat? 

We calculate the amount of the total wealth owned (free of debt) during one Hawl (one lunar year = 355 days) and we give 2.5% (meaning 1/40) of that amount to one or many of the eight categories of needy Muslims. 

6. Example of how to calculate Zakat? 

Suppose that the wealth amount equal to or exceeding the Nisab is 50 000$ and that those 50 000$ were held during one lunar year. Then the wealth owner would have to give 50 000$ * 2.5% = 1 250$ as Zakat. 

7. Are all investments subject to Zakat? 

Investments that are 100% Sharia-compliant are not subject to Zakat because they are already pure and the purpose of Zakat is to purify investments. 

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