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Zakat Calculation

May 2, 2020

Zakat is a mandatory charitable contribution on the value in Muslim’s possession. Zakat and Prayers are always coined together. Establish Salat, give Zakat and obey the Messenger so that you may receive [this] Mercy!” (Quran 24:56). Zakat literally means “that which purifies“. It does purify the wealth of all Muslims.

According to the Quran’s, there are eight categories of people (asnaf) who qualify to benefit from zakat distribution. “Alms are for the poor and the needy, and those employed to administer the (funds); for those whose hearts have been (recently) reconciled (to Truth); for those in bondage and in debt; in the cause of Allah; and for the wayfarer: (thus is it) ordained by Allah, and Allah is full of knowledge and wisdom.” — Qur’an, Sura 9 (Al-Tawba), ayat 60[50]

Scholars have interpreted this verse as identifying the following eight proper categories of recipients of zakat:

  1. The poor: Those living without means of livelihood (Al-Fuqarā’), the poor
  2. The needy: Those who cannot meet their basic needs (Al-Masākīn), the needy
  3. Zakat collectors (Al-Āmilīyn ‘Alihā)
  4. To persuade those sympathetic to or expected to convert to Islam (Al-Mu’allafatu Qulūbuhum) and recent converts to Islam
  5. To free from slavery or servitude (Fir-Riqāb)
  6. Those who have incurred overwhelming debts while attempting to satisfy their basic needs (Al-Ghārimīn), debtors who in pursuit of a worthy goal incurred a debt
  7. Those struggling in the way of Allah
  8. Wayfarers, stranded travelers (Ibnu Al-Sabīl): travellers who are traveling with a worthy goal but cannot reach their destination without financial assistance

Zakat cannot be given to one’s own parents, grandparents, children, or grandchildren.

Hence, one must learn how to calculate correctly because this is an obligation and we can not perform it without exact calculation. One can offer extra but the zakat is fulfilled if the amount paid is less than the due amount.

For any asset / money to be zakatable, it must meet the following conditions:

  1. Zakat is an obligation on the accessible and develop-able wealth of the free Muslim
  2. Total Zakatable must be equal or higher than the Nissab, after deducing the basic needs of the zakat payer and his immediate family and after deducting payments for current debt, during the zakat-year.
  3. Zakatable money has dated for a lunar year

For the majority of Islamic schools of fiqh, if any of these three conditions are not met. Zakat will not be due. The hanafi school has their own conditions that are not congruent with the rest of scholars. This article presents the non hanafi version followed by the majority of schools of fiqh.