I have a question regarding zaakat. When it is paid on a yearly basis is the 2.5% due on your surplus earned during that given year alone or is it due on your entire surplus. E.g. if I earned a surplus of 10 thousand during this year but my life savings is 100 thousand do I pay zakaat on the 10 thousand or on the 100 thousand plus 10 thousand ($110,000). I am confused with regards to that. Thanks
Zakaah must be paid on the total amount of money that you have in your possession as a savings at the time when you are paying it (the Zakaah). This means that the monies you have saved in the past years, as well as that which you have saved in the present year, are all subjected to Zakaah. With this principle, it means that based on the above question, you will be required to pay Zakaah on $110,000.00.
And Allah knows best,
Mufti Waseem Khan