Message: Assalamu Alikum,
Is zakaah payable on “back pay” immediately? My company has just settled negotiations with our union for the period 2009-2011. As a result, our new salaries would be paid retroactively. Thus we get a lump sum payment now (back pay). My question is, now that I received this money 6 years later, is it zakaah payable immediately or do I have to have it in my possession for a year?
Wa Alaikum Assalaam,
الجواب و بالله التوفيق
If you are in possession of the nisaab at present, then when paying Zakaah at the end of your Zakaah year, you will add whatever money you have remaining of this lump sum to the savings amount which you may possess at that time, and pay on the total sum.
Therefore, this money (the total amount-if you keep it as savings, or the remaining amount-if you have spent from it) will be added to your annual savings amount and the Zakaah will be paid on the total sum.
If however, you did not have a nisaab, and by receiving this lump sum you became the owner of the nisaab, then in this case, you will allow one year to pass over this money and then pay Zakaah on it. In other words, this money will have to remain in your possession for a complete year before you pay Zakaah on it.
In this case, it is not necessary that you keep the entire amount in your possession in order to pay Zakaah. You are free to use from your money as you wish for your needs etc. At the end of your Zakaah year, you will look to see if the remaining amount is equal to the nisaab or above. If it is, then you will pay Zakaah on that remaining amount even though it may have decreased from the original figure. If however, it is lower than the nisaab (and you no longer have the nisaab), then you will not be required to pay Zakaah even though some of the monies of the lump sum may still remain with you.
And Allah Knows Best.
Mufti Waseem Khan.