When paying Zakaat, how do I calculate it? Is it 2.5% of my savings alone? Or is it everything that I own. And what is considered as savings? Also, when is the best time to pay Zakaat?
Zakaat is calculated by paying 2.5% of the savings alone and upon everything you own.
Savings here refer to whatever you may possess as monies that are not used for needs and necessities, payment of a loan etc. and are normally understood as your savings which have been set aside from your normal daily usage.
Whenever your savings reach a nisaab, you must take that date into consideration and take note of it. From that date, when a year comes to an end and you are still in the possession of a nisaab, then zakaat becomes compulsory upon you. At this time you will be required to pay 2.5% upon the total amount that you posses as your savings.
The best time to pay your zakaat is when it becomes compulsory upon you. This can occur at the time when a complete year has passed over your savings when it had reached a nisaab. Many people chose to pay their Zakaat in Ramadhan, since they hope to achieve more blessings.
And Allah knows best.
Mufti Waseem Khan