ISNA is offering this brief guide to calculating zakah as a service to the Muslim community in North America. Zakah is the right of Allah on a Muslim's wealth (Maal), be it that of an individual or an organization, and whether the person is minor or adult, sane or insane.
Every Zakah payer must calculate his/her Zakah independently. Zakah becomes due when the wealth of any person is above the limit of poverty (Nisab) as determined every year by the Federal government of U.S.A and Canada (where he or she resides). All wealth of market value is subject to Zakah.
NOTES:
1. Originally, and in analogy to Zakah on agricultural land as expressly determined by the Prophet (pbuh),
2. Zakah is taken from the yield of invested wealth. Shari'ah prescribed Zakah at a higher rate on reinvested wealth in view to encourage spending on development and for the increase of wealth.
3. All objects of value, movables and immovables , are exempt from Zakah as long as they are destined
4. For personal usage, consumption and/or for causing income to occur, e.g.; house to live in, car for transport, books for reference, jewelry for normal adornment according to tradition and social status, etc. However, the capital spent for purchasing such goods should be subjected to Zakah in the year it is spent. If a person realizes, say $10,000 during the year, and spends $3,000 during the same year to buy durable goods for his personal use, he must include the whole $10,000 in his Zakatable income. In the subsequent years, such personal and income producing goods will be exempt from his Zakah.
5. No amount of Zakah can turn unislamically earned wealth into halal income.
6. The attached schedules indicate the various items subject to Zakah and their categories according to what is due on them. The lists naturally do not include every sort of wealth, Yet they are comprehensive enough and the Muslims could easily identify any other category of wealth not listed therein.
Zakat-ul-Fitr (Sadaqat-ul-Fitr)
The amount of Zakat-ul-Fitr required from each household member is estimated as $7.00 per person. (Zakat-ul-Fitr is due before the end of the blessed month of Ramadan)
Zakah Calculation Form
SCHEDULE 1
Items Subject to 2.5% on Capital and Yield
1. Any cash on hand kept for one year.
2. All income before any tax or pension or insurance deductions.
TOTAL OF ZAKATABLE AMOUNT (ADD 1&2)
Zakah (Total of zakatable amount x 0.025) (-) Less any payments already made towards Zakah
NET BALANCE DUE
SCHEDULE 2
Items Subject to 10% Zakah on Yield
1. Land produce after deducting agricultural expenses, including irrigation, and before taxes.
2. The net profit (total revenue minus direct expenses) of trade and industry (before deducting any depreciation allowances or reserves or taxes)
3. The profits of shares or participations in partnerships or subordinate capitals, before deducting any depreciation or reserves or taxes.
4. Incomes and rentals from real estate, less expenses of debt and any other direct expenses, but not depreciation or reserves or taxes. Realized capital gain on sales of stocks and bonds and the like.
TOTAL OF ZAKATABLE AMOUNT (ADD 1 THROUGH 5)
Zakah (total amount x 0.10) (-) less any payments already made towards Zakah
NET BALANCE DUE
REMARK:If the Zakatable income is composed of items subject to 2.5% (schedule1) and others whose yields is subject to 10% (schedule 2), Nisab has to be divided in the same proportion of the two items. The Nisab proportion is subtracted from each category and the result is to be multiplied by the related rate, 2.5% or 10%.
EXAMPLE (1):
Total incomes from Schedule (1) subject to 2.5% 60,000
Total incomes from Schedule (2) subject to 10% 40,000
Total Income 100,000
Nisab, (poverty Limit) = $10,000 to be divided into 6,000 and 4,000. Thus,
Zakah on Schedule (1) =$60,000-6,000 = $54,000 x2.5% $ 1,350
Zakah on Schedule (2) =$40,000-4,000 =$46,000 x10% $ 4,600
TOTAL $ 5,950
Frequently Asked Questions and Answers
By Dr. Hussein Al-Hussein
Do I have to pay Zakah?
Yes, it is a Fard (must) on every Muslim capable of paying it. It is also one of the five pillars of Islam.
How often do I have to pay?
For most items such as cash, stocks, gold, silver, It is paid once every lunar year (not solar year) For fruits, vegetables and other produce, it is paid once only at the harvest time every time there is a harvest. For the items that require Zakah every year, it is better to fix a lunar month such as Ramadan (for more reward) and pay during that month.
Who do I pay to?
It is paid to the main eight categories mentioned in the Qur'an. Among the ones we face often now are the poor, the needy, the ones who owe a lot of debt, and in the sake of Allah (s.w.t). You can pay it to MCA and write in the memo Zakah so that the people in charge will make sure it is spent in one of the eight categories.
What do I pay Zakah on?
You pay Zakah on the wealth you have that is not for use for clothing, food, housing, and tools, if it exceeds the Nisab.
How much is the Nisab for gold?
It is 20 dinars of gold, which is 96 gm according to most books and 85 gm according to Dr. Yousuf-Al-Qaradhawi in his book and thesis "Fiqh-Az-Zakah". He found that the Mithqal of gold was not held constant by Muslims later on, even though the prophet (s.a.w) told them to fix it to Makkah's Mithqal and to fix the Mikyal to Madinah's Mikyal since the Makkans were people of trading and the Madani people were people of farming. The current price of gold as of this week (Dec 2000) is $415. An ounce is 28.35 gm.
How much is the Nisab for silver?
It is 200 dirhams of silver, which is 672 gm according to most books and 595 gm according to Dr. Yousuf-Al-Qaradhawi in his book and thesis "Fiqh-Az-Zakah". The current price of silver as of this week (Dec 2000) is $5.8/ounce.
How much is the Nisab for cash?
It is the equivalent of the gold Nisab in cash. So, it is $1400 using the 672 gm or 1240 using the 595 gm used by Al-Qaradhawi in his book and thesis "Fiqh-Az-Zakah". The current price of silver as of this week (Dec 2000) is $5.8/ounce.
Do I have to pay Zakah on the car and house that I own and rent out to people?
No, you do not have to pay Zakah on the value of the house or the car but on the amount of money earned from renting them.
How do I pay Zakah on the merchandise that I trade?
You have to have the Nisab at the beginning and end of the year (say last Ramadan and this Ramadan) and you have the intention of buying and selling the merchandise not owning it. If this is the case, then you evaluate the merchandise you have this year and you pay 2.5% on that value after deducting the business expenses such as rent of the place and maintenance of the merchandise. You pay on the current value if it is above the Nisab not on the lesser of last year's and this year's value.
Do I have to pay Zakah on gold, silver, precious stones, and other jewelry that is used for ornament only?
If the jewelry is not bought for trading but for use by the women in the house then you do not need to pay Zakah on it. Since it is Haram for a man to wear gold and other jewelry he owns above the Nisab value; this does not apply to the silver ring he may be wearing since it is sunnah for men to wear silver rings.
How do I pay Zakah on the cash I have?
If the cash you had exceeded the Nisab last year and this year, then pay Zakah on the current amount of cash you have.
How do I pay Zakah on the stocks that I own?
Treat them like merchandise; evaluate them and see if you had the Nisab last year and this year; then pay Zakah on the current value if both values are above the Nisab.
Do I pay Zakah on money people owe me but have little hope of getting it back?
If it is a dead debt and you chances of getting it back are slim then you do not pay Zakah on it. If you ever get it back, you pay Zakah for one year.
Do I pay Zakah on money people owe me and I have hope of getting it?
There are differences here. Abu Hanifah says that you pay do not pay Zakah until you get it back and then pay Zakah on all the years. Ash-Shafi'I says that you pay Zakah on it. Other opinions say that you pay on one year when you get it back.
If my wife is poor, can I pay my Zakah to her?
You cannot pay Zakah to people you are financially responsible for their provision such as your wife, sons, father, mother, etc.
If I am poor, can my wife pay her Zakah to me?
Yes, she can, since she is not financially responsible for your provision. She will also get a reward for Zakah and a reward for spending on you.
Do I add my gold to my cash to achieve the Nisab if neither of them is above the Nisab?
No, you do not.
Do I pay Zakah on the value of my computer on the value of the memory in it for example?
If the computer is for your personal or business use, then you do not pay Zakah on it. However, if you sell and buy computers, and the computer is just an item of merchandise, not the one you use, then you include it in the merchandise that you pay Zakah on. The same about the memory, If you sell and buy memory, and the memory you are asking about is not for use by you, then you include it in the merchandise that you pay Zakah.on.
Who has to pay Sadaqat-ul-Fitr?
It is a Fardh (must) on every free mature Muslim, child or grown up, man or woman, who owns more than the amount of Sadaqat-ul-Fitr beyond his basic needs. The adult free Muslim man must pay for all the individuals he is financially responsible for their provision, such as his children, wife, and servants.
Whom do I pay Sadaqat-ul-Fitr to?
Same categories of Zakah. If you pay it to MCA to deliver it to its destination, make sure to write in the memo "Fitrah or Sadaqat-ul-Fitr" so that they will deliver it before Eid.
How much do I have to pay?
It is one Sa of wheat, dates, rice, corn, beans, or any item of the daily food. The Sa' is four Mudds. A Mudd is the amount that fills both hands when open jointly together. Some scholars allowed the use of cash if it is more useful for the ones it is paid to; in this case, it is about five to seven dollars for each member of the family. There are so many families in need for both the Fitrah and Zakah that come to the Islamic Center, and the MCA Zakah committee members know them.
Do I pay Sadaqat-ul-Fitr on the fetus if my wife is pregnant?
No, you do not have to. You do have to pay, however, if she delivers before the Eid prayer.