Zakat is a fundamental obligation and one of the five pillars of Islam. It is a duty for every accountable and capable Muslim. So, how much is Zakat on wealth? Its known threshold is 2.5% of the total assets and wealth if a year passes over them.
· Importance of Zakat in Islam
Zakat is the third pillar among the five pillars of Islam, a duty imposed by Allah on every Muslim who possesses wealth above a certain percentage. In Arabic, Zakat means "purification" and "growth." It serves as a purification for the soul and wealth and contributes to the growth of both material and spending in the path of Allah.
Zakat goes beyond mere distribution of money to the poor and needy; it is an act of worship that Muslims perform for the sake of Allah. It constitutes an integral part of the social and economic system in Islam, promoting justice and equality in society by encouraging the reduction of economic disparities among individuals. Zakat also serves as a benchmark for social success and progress, fostering charitable acts and supporting the community in spreading a spirit of goodwill and volunteerism.
· How to Calculate Zakat on Wealth?
The Zakat percentage is determined at 2.5% of the savings owned by the Muslim, if these savings have been in their possession for a full lunar year without being spent, after deducting debts and essential obligations. The Nisab, which is the minimum threshold of wealth a Muslim must possess for Zakat to become obligatory, is equivalent to 87.5 grams of gold or 612.4 grams of silver, or their equivalent in other forms of savings. The exact value of Zakat depends on the local currency, given the variation in currencies and their values from one country to another and over time.
The Zakat percentage varies based on the wealth owned by the Muslim. For liquid assets, including cash, bank balances, stocks, bonds, and other financial instruments, as well as jewelry, gold, and silver, the Zakat rate is 2.5%. For example, if the net wealth were $10,000, the Zakat on this wealth would be $250. The Zakat percentage for other assets like land, real estate, and livestock varies depending on the type of wealth.
· How to calculate Zakat on wealth?
There are two methods for calculating Zakat on wealth:
a) Divide the value of savings by 40.
b) Divide the value of savings by 100 and multiply the result by 2.5.
· What are the conditions for the obligation of Zakat on wealth?
For Zakat on wealth to be obligatory for a Muslim, the following conditions must be met:
1) Freedom: Zakat is not obligatory on slaves.
2) Complete Ownership: The wealth must be fully owned and stable.
3) Growth: The wealth should have the potential for growth, excluding funds set aside for acquisition.
4) Excess Beyond Needs: Zakat is obligatory if the Muslim's wealth exceeds their basic needs for sustenance, clothing, housing, family support, and other life necessities.
5) Nisab Threshold: The Muslim must possess wealth equal to or exceeding the Nisab, the minimum amount for Zakat to become obligatory.
6) Lunar Year: The wealth must have been held for a full lunar year for Zakat to be obligatory.
· What are the legitimate expenditures of Zakat on wealth?
Zakat in Islam is allocated to the following eight categories:
1. The Poor: Those who have no wealth or insufficient means to meet their basic needs.
2. The Needy: Those who have some wealth but not enough to cover their needs.
3. Zakat Collectors: Those responsible for collecting and preserving Zakat.
4. Winning Hearts: Groups whose hearts need to be reconciled or strengthened in Islam.
5. Those in Bondage: Slaves and captives in the custody of non-Muslims.
6. Those in Debt: Those burdened with debts and unable to repay, for two purposes: reconciliation and meeting needs.
7. In the Path of Allah: Jihadists and those striving for the advancement of God's word.
8. Wayfarers: Travelers whose means have been exhausted, even if they are wealthy in their own land.
According to a fatwa number 1/1/11/1206 from the Fatwa Department, it is permissible to give Zakat and charitable donations to orphaned children and those who lack family support, with no distinction between them regarding the rewards of spending on them or caring for them.
· When is Zakat on wealth should be paid?
Zakat is paid annually, and it is preferable to pay it during the blessed month of Ramadan. This month is when Zakat is often distributed to those in need.
Islam encourages the direct distribution of Zakat to the needy and the poor. This is accomplished by donating to charitable associations and organizations working in this field.
Donating Zakat through charities and charitable organizations has the advantage of saving time and effort while ensuring that Zakat funds reach those who deserve them. This is in contrast to donating Zakat individually.
Donate your Zakat to the SOS Children’s Villages Jordan
Contribute to providing a warm home and a family atmosphere for each child through your donation of Zakat, which has been approved by the Jordanian Fatwa Department (legal fatwa).