# ZAKAAT CALCULATION

QUESTION:

As Salam Alaikum,
I have  questions regarding Zakat calculations:
Question 1: From the annual calculations of zakat , do we need to deduct the following amount as deductible liabilities from my Assets in order to find the net value on which zakat ( 2.5% ) will be applicable ? :

The Liabilities as follows:

– Car Lease Payment ( Next 12 months )

– Apartment Rent Charges ( 12 months )

– Children School Fee ( 12 months )

– Tax Payable to Govt. ( Annual )

– Utilities Bills ( 12 Months )

– Other Liabilities ( Purchasing food commodities for oneself and his family – next 12 months )

Question 2 : I have booked the property for Investment in 2002 and paid its value through installments to next 10 years. In 2012 , I got possession of this property.
So zakat would be applicable on market value right after 2002 when i booked that property or starting from  2012 ( when i got the actual possessions of that property )

As Salaam Alaikum,

1. Zakat is payable on your savings and not on monies which you have for your daily and monthly expenses.

With respect to depts or loans which must be paid, only such depts and loans will be deducted which are payable at the time you are paying Zakaat. You will not look ahead over the next twelve months and deduct the expenses which are yet to come about (over the period) if you are paying Zakaat at the present time.

People in general, normally pay their daily/monthly expenses from their monthly salaries/income, and would rarely dip into their savings which they have set aside.

Therefore, you will find that a person who receives a monthly salary will pay his car lease payment, apartment rental, school fees, utility bills, groceries and other daily requirements from his salary. These are monthly expenses which a person has to take out on an ongoing basis and will normally be taken out from one’s monthly salary. As for Government taxe, whenever this becomes due, a person pays it from his income which he receives on a regular basis.

As such, if you are going to pay Zakaat at this time, then you will pay on your savings that you have, and not on the monies you may have at home or in the bank from which you are using for your day-to-day and ongoing expenses like that which have been mentioned above.

Therefore, when paying 2 ½ % on your savings (as Zakaat), you will not deduct the expenses for the next 12 months for car lease payment, apartment rent  charges, children school fees, taxes to Government, utility bills, food, groceries etc.

If however, any, or all of the above expenses are taken out from your savings or monies from which you are paying Zakaat, then only those expenses that are due at that time ( of that month) can be deducted, not of the other upcoming months.

1. Zakaat will be applicable when you become the owner of the property and got possession of it in 2012. If the property is for sale, then from that time, you will pay Zakaat on its market value. If it is not for sale, then no Zakaat will be payable on it. If the property is rented to others, then you will pay Zakaat on the rent received and not on the property.

And Allah Knows best

Mufti Waseem Khan

20/1/2017

# Do I have to pay Zakaat on equipment for rent?

If someone has a business renting equipment’s like compactors and jackhammers etc. and the all those tools worth \$60,000.00. That person was in a debt and also had to sell a piece of land to repay it and the debt was repaid. The land was sold 4 months ago.  Does that person have to pay zakat on business and the remaining amount of money? I was told that a year has to pass on the savings before paying.

Wa Alaikum Assalaam,

Zakaat is not paid on equipments that are for rent. It is only paid on items and equipments you have for sale. Hence, you will not be required to pay zakat on the compactors, jack hammer etc. What you will have to do is pay zakat on whatever monies which may come about from rentals and are together with your savings. After a year has passed over your Nisaab, then you will pay 21/2 % on the total amount of money in your savings.

A year is not required to pass over your savings specifically. From the time your money (savings) had reached the nisaab, you will check one year from that date. Then when one year has passed from that date, you will look at all the monies which you have achieved during the course of the year. This will include monies gained from renting equipments and the money which remained from the sale of the land after repaying the debt.

Upon the completion of the year, you will pay Zakaat upon the entire amount after subtracting whatever debts, bills etc. you will have to pay from that money.

And Allah Knows Best.

Mufti Waseem Khan.

22/06/17.

# Zakaat on Loan (Lent Out)

Question:

Assalaamu Alikum Mufti Waseem

I just wanted to find out something with regards to Zakat. If you lend some one money and they have not paid you back up till date..do you still have to include it in the Nisaab when you are calculating your Zakat??
Jazaak Allah

Wa Alaikum As Salaam

Seeing that you are the owner of the money you lent out, you will be required to include it in your savings while calculating your Zakaat, even though they have not paid it back as yet. If it is difficult to do so at the present moment, then you can wait until you collect the monies owed to you and pay the Zakaat on it at that time (when you receive it).

And Allah Knows Best

Mufti Waseem Khan

14/6/2017

# Can Zakaah be used for repairing a Masjid?

Assalamu Aalikum, can I give my Zakaat to the repairs of a masjid?

Wa Alaikum Assalaam,

No, Zakaah cannot be given to do repairs or maintenance of a Masjid.

And Allah Knows Best.

Mufti Waseem Khan.

6/6/17.

# Can I receive Zakaat? How should I Fast?

Asalaam wa Alaikum

I have a chronic disease named sickle cell disease which is incurable scientifically I would like to know does this qualify me for Zakaat and how do fast during Ramadhan jazakaAllah.

Wa Alaikum Assalaam,

الجواب و بالله التوفيق

If you are in a state where you need assistance and you cannot do anything to earn a livelihood, then you can accept Zakaat.

If, on account of this disease, you cannot observe the fast, nor do you expect to have the health and strength in the future to keep the fast, then you may avoid observing the fast and pay fidya for each day missed.

If you are not financially able to pay fidya for missing the fast, then you will be absolved from this.

And Allah Knows Best.

Mufti Waseem Khan.

29/9/16

# In the following, how will I pay Zakaah?

Assalamu Alaikum,

Please confirm this scenario for Zakah payment:

I have a savings for the past ten years accumulating to about \$48000, which is \$400 per month I have been saving. I have always had the Nisaab. Last year I paid Zakah on the total savings for the 9 previous years.

I once again have the nisaab this year. Do I have to pay Zakaah on this savings for the accumulation of the 10 years or only for the last year which amount to \$4800.00. Please advise. Jazaakallah.

Wa Alaikum Assalaam.

الجواب و بالله التوفيق

You will need to pay Zakaah on the total current savings for only one year (which is the present year).

And Allah Knows Best.

Mufti Waseem Khan.

5/7/16.

# UNDERSTANDING THE CALCULATION OF THE NISAAB OF ZAKAAH

UNDERSTANDING THE CALCULATION OF THE NISAAB OF ZAKAAH

By Mufti Waseem Khan.

The term nisaab refers to the maximum amount of wealth (in savings) a person should possess in order for him to give the compulsory charity, known as Zakaah. It should be understood that during the time of the Prophet (S.A.S) the use of gold and silver coin was prevalent. Hence, while stipulating the nisaab, the Prophet (S.A.S) used the gold and silver coins. He stipulated that if a person had silver coins then his nisaab will be 200 pieces and if he possessed gold coins, his nisaab will be 20 pieces. When either currency reached its respective nisaab, it was compulsory to pay 21/2% of his savings when one year had passed over it.

As time passed and the usage of gold and silver coins became replaced with the medium of exchange, which is commonly known as ‘Money’ (represented by paper notes), the early Fuqahaa (Jurists) had to calculate the weight of gold and silver which were equivalent to the nisaab specified by the Prophet (S.A.S). Twenty gold pieces worked out to be 2.8 troy ounces of gold, while two hundred silver pieces worked out to be 19.7 troy ounces of silver. Being out of general use, these measurement (2.8/19.7 troy ounces) then became the standard nisaab of gold and silver. As such, if a person possessed only gold then he had to pay 21/2% of the total value when it weighed 2.8 troy ounces or more. Similarly, if a person possessed only silver, then he had to pay 21/2% of the total value when it weighed 19.7 troy ounces or more. It is worth mentioning that during the time of the Prophet (S.A.S) and afterwards the value of the two hundred silver coins (Dirhams) were equal in value to the twenty gold coins (Dinaars). As such, a person at that time could have used 200 dirhams as his nisaab or 20 dinaars (since both were equal in value). In other words, 19.7 troy ounces of silver were equivalent to 2.8 troy ounces of gold at that time. However, when the value of the above mentioned amount of silver started to differ from the value of gold, it became necessary to identify which of the two values Muslims should use for the calculation of Zakaah.

Taking the guidelines of the teachings of the Prophet (S.A.S) into consideration, as well as the fact that the Messenger of Allah (S.A) did specify a nisaab in silver, which afterwards became lower then gold, the early Fuqahaa (Jurist) of Islam concluded that the Nisaab of silver should be used since it is in accordance to the blessed teachings of the Prophet (S.A.S); it is more beneficial to the poor and needy; and it is more precautious in one’s religious affair.

In this regard, the Mazhab of Imam Abu Hanifah clearly clearly states,

The nisaab which should be used is that one which is more beneficial to the poor, as such, whichever nisaab is reached from gold or silver, then that will be a person’s nisaab. If a person’s savings/merchandise is fulfilled/reached/met with one of the nisaab and not the other, then the one which it reached will be deemed as his nisaab.’

This statement and explaination is one which has been written, preached and propagated by the Hanafi Jurists as well as other Mazhabs, and many of the pious predecessors from the time of Imam Abu Hanifah until present, and can be found in the most authentic books of Hanafi Fiqh such as Hidaayah, Shaami, Nihaayah, Bahr Raaiq, Alamgiiri etc.

Based on this guideline, the latter and cotemporary Hanafi Scholars as well as many other Scholars have adopted silver for calculating nisaab, since due to its lower value, it will be reached before the nisaab of gold, which is higher. In using this nisaab, more people will be able to give Zakaah (which is a minimum of 21/2%) and will therefore be more beneficial to the poor. It is also a means of being precautious in one’s religious duty.

# Nisab for Zakah

By Mufti Waseem Khan

The term ‘Zakaah’ in Islam comes from the Arabic word ‘zakaa’ which literally means to purify, to increase, to grow and to be good. In Islamic terminology, it refers to that portion of ones’ wealth which is given as an act of worship to a particular person or persons with certain conditions. As taught by the Holy Quran the act of giving Zakaah purifies and cleanses the giver from sins and iniquities and it also brings an increase to his wealth. The Holy Quraan states, “Take from their wealth alms in order to purify them and sanctify them with it”. (Chap. 9 Verse 103)

In another verse it states, “Allah will destroy Riba ((usury) and will give increase for charity and alms”. (Chap. 2  Verse 276).

Zakaah which is normally understood to be a ‘poor due’ is in reality a great form of worship which far exceeds the concept of simply helping the poor or giving charity. According to the teachings of the Holy Quraan and the Prophet Muhammad (SA) it is regarded as one of the five fundamental pillars upon which the religion of Islam rests. In this regard there are over twenty verses of the Holy Quraan in which the command is given to the Muslims to “establish regular prayers (Salaah) and give Zakaah”. In the same manner, the Holy Prophet Muhammad (SA) has said, “Islam is founded on five pillars, – testifying that there is no one worthy of worship except Allah (the one true God) and that Muhammad (SA) is the Messenger of Allah; performing the prayers (Salaah); giving (paying) the Zakaah; making the pilgrimage (of Hajj); and fasting in the month of Ramadaan”. ( Bukhaari and Muslim). In light of these sacred teachings, ‘Zakaah’ has been deemed as a compulsory duty in Islam and has a deep significance in the lives of Muslims.

It should be understood that although Zakaah is known to be a charity or poor due, it differs from the regular optional charity or Sadaqah which can be given by each and every Muslim. In fact, all Muslims are encouraged to be charitable to the extent of their ability.

While outlining the order and command of Zakaah upon the Muslims, the Holy Prophet Muhammad (SA) has explained that it is not a duty which has been imposed upon every single Muslim. Instead, it is one which has been placed upon those who are not poor and needy and are well to do. This is clearly established from the tradition of the Prophet (SA) in which he advised his companion Muaz bin Jabal, (when he sent him to Yemen), with the following words: “Tell them also that Allah has enjoined Zakaah upon their wealth which will be taken from their well to do people and distributed to their poor people.” (Bukhaari, Muslim)  This tradition along with others, makes it abundantly clear, that with respect to Zakaah, there are two categories of people. They are (a) those who must pay and (b) those who are entitled to receive.

The Holy Quraan as well as the teachings of the Holy Prophet Muhammad (SA) have given sufficient guidelines regarding both these groups.

As for those who are entitled to receive the Zakaah, the Holy Quraan states, “Alms are only for the poor and the needy, those who collect them, those whose hearts have been (recently) reconciled (to the truth), for those in bondage and in debt, those in the cause of Allah, and for the way farer; a duty imposed by Allah. Allah is the Knower and the Wise.” (Surah Tauba  Verse 60)

In this verse eight categories of people are listed who can receive Zakaah

As for those who must pay the Zakaah, the Shariah has also given sufficient guidelines so that each person can fulfill this compulsory duty which has been imposed on him/her.

Zakaah, as an act of worship is connected to ones’ wealth and hence it is the state of a persons’ wealth  which would determine when the Zakaah is compulsory upon him or not.

NISAAB OF ZAKAAH

While identifying this state (of a persons’ wealth), the Shariah of Islam has established a certain amount (in one’s wealth) which must be reached before this duty becomes compulsory upon an individual. This amount in Islamic terminology is called the ‘Nisaab’.

According to the authoritative and authentic works of the early scholars and Jurists of Islam, Nisaab is defined as, ‘The minimum amount of property liable to payment of Zakaah.’ (Pg. 480 – Mu’jam lughah al Fuqaha – Dictionary of Islamic Legal Terminology by Dr. Muhammad Rawwas and Dr. Hamid Sadiq)

The same is also mentioned in (Mu’jam Al Mustalahaat Ad-deeniya- Dictionary of Religious terms by Dr. Abdullah Ibn Ashiy Al Maliki and Dr. Abdul Latif Sheik Ibraheem), it states, ‘Nisaab is the minimum quantity or amount of property liable to payment of obligatory poor due.’

It is therefore a condition for the obligation of Zakaah that a person’s wealth must be of a certain minimum amount, (Nisaab) after which Zakaah can be paid.

It is important for Muslims to know and understand that the Nisaab (the minimum amount liable to Zakaah), for each category of wealth has been fixed and specified by the Holy Prophet Muhammad (SA) upon divine guidance from Allah.

It is for this reason one will see that a Nisaab has already been fixed for livestock, land produce, treasures and minerals, gold and silver. Not only has the Nisaab been fixed but the rates of payment have also been specified by the noble Messenger of Allah (SA). In this manner the Nisaab was also established for money/currency.

However, due to the fact that during the time of the Prophet (SA) two metals namely, gold and silver, were being used as money, gold in the form of Dinars (gold coins) and silver in the form of Dirhams (silver coins) the Prophet (SA) obliged Zakaah on both, dirhams and dinaars. In this regard, the Prophet (SA) is reported to have said, “There is no Zakaah on anything less than five uqiyyas of silver.” (Reported by Ahmad and Muslims and has been considered sound and authentic by both).

As quoted by the renowned scholar of the past An-Nawawi, he says it is the unanimous consensus of the scholars that one uqiyya equals 40 dirhams, thus five uqiyya equals 200 dirhams. (Al-Majmu’)

Similarly in another tradition narrated by Imam Muslim, the Holy Prophet Muhammad (SA) is reported to have said, “And on silver, for every two hundred dirhams, the due is 2½ %. If there are only one hundred and ninety, Zakaah is not due on them unless the owner volunteers to pay”. In another narration reported by Ibn Qudaamah, he says, ‘It is authentically reported from the Prophet (SA) that he said, “On silver 2½ % is due”. (Al- Mughni)

Based on these traditions, it has become established that the Nisaab of silver was fixed and made specific in the Shariah of Islam. This has been the unanimous agreement of the Sahabahs and the entire Muslim Ummah.

Like the silver coins, a Nisaab was also fixed for the gold coins (Dinar). According to the opinion of the majority of jurists, 20 dinars (gold coins) were fixed as the Nisaab for gold.

It should be understood that both these Nisaab were distinct and separate from each other. In this regard Dr. Yusuf Qardhawi writes, ‘The Nisaab of gold is independent from that of silver’. This  is so, since the Holy Prophet (SA) himself specified two separate Nisaab, one for silver and the other for gold.

With respect to the weight content of silver and gold found in these coins, the early jurists and scholars of Islam have given the following guidelines which have been adopted by the Muslim Ummah:

They are: –

(1) Silver

1              dirham (silver coin)

= 3.06 grams of silver.

200       dirhams

= 612 grams of silver.

Based on this weight the Nisaab of silver has been fixed at 612 grams / 19.7 ounces.

(2) Gold

1               dinar (gold coin)

= 4.25 grams of gold.

20            dinars

= 85 grams of gold.

Based on this weight the Nisaab of gold has been fixed at 85 grams / 2.8 ounces.

It is worth mentioning that during the time of the Prophet (SA) and afterwards, the value of 200 dirhams (silver coins) or 612 grams of silver was similar to the value of 20 Dinaars (gold coins), or 85 grams of gold. As such the Nisaab of each did not pose a problem to the Muslims. However when the value of gold began to differ from that of silver, it became necessary to identify which of the two Nisaab must be used for the calculation of Zakaah in cases of money (cash) and articles of merchandise.

While acknowledging and accepting both Nisaab as valid and sound, some of the early jurists and scholars adopted the gold Nisaab simply because of its minimal fluctuation.  Many other jurists from the former and latter generations (of Muslims) however, accepted and adopted the silver Nisaab and considered it most appropriate for non-metal money (paper currency). They explained that this should be adopted since:

1)            The silver Nisaab is determined explicitly by the authentic Sunnah (teachings of the Holy Prophet Muhammad [SA]) and the Ijma’ (Unanimous agreement of all the Sahabahs / companions of the Prophet) unlike the gold Nisaab which does not hold this position.

2)            It is more beneficial to the poor and needy, which in reality, is the main objective of paying Zakaah.

3)            It is more precautious in one’s religious duty.

4)            The Nisaab of silver has been clearly specified by the Holy Prophet Muhammad (SA) and must not be altered due to the change in times. It is a divine injunction which is not subjected to analogy.

5)            There is no proof in the Shariah which shows that one Nisaab must constantly be changed to facilitate the value of the other one. If this is the case then the original law of the Shariah would eventually be changed.

# Does one have to pay zakaat on money worked for but not yet received?

Assalamu Alaikum.

Does one have to pay zakat on money worked for but not yet received? I worked overtime in March to May of this year 2016 but most of the money has not yet been paid to me by my employer.

Wa Alaikum Assalaam,

الجواب و بالله التوفيق

Whenever you receive it, you can add it to your savings and pay Zakaah on it at the end of your Zakaah year. Seeing that until now you have not received it, you are not required to pay on it.

And Allah Knows Best.

Mufti Waseem Khan.

29/06/16.

# If i am obtaining wealth to build a house, do i have to pay zakaat on the wealth?

If someone is obtaining wealth to build a house is zakaat compulsory in this case.

Assalaamu Alaikum Wa Rahmatullah,

الجواب و بالله التوفيق

If the monies already saved have reached the Nisaab and one year has passed over this nisaab then you will have to pay zakat on it.

Also, if you already possessed a nisaab besides the wealth you are obtaining to build the house, and this wealth was still in your possession when your zakat year ended and you were paying zakat, then you will include it in your total and pay zakat on the entire amount.

If however, the wealth for building the house came into your possession but was used up before the date arrived when you paid your zakat at the end of a year, then you will not pay zakat on it.

And Allah Knows Best.

Mufti Waseem Khan.

21/06/16