National Zakat Foundation

ZakaT

"Islam is to testify that there is no god but Allah and that Muhammad is Allah’s Messenger, to perform the prayer, pay (the charity of) Zakat, fast (the month of) Ramadan, and make the pilgrimage to the Holy House (Ka’ba)" [Bukhari]

Zakat is the third pillar of Islam and its literal meaning is the same as a blessing or an increase. It also means purity and rectification. The Shariah requires that a minimum of 2.5% of our net wealth should be given in Zakat every year.

Zakat has certain conditions attached to it. Please see the FAQs to learn more.

On which items do you need to be pay Zakat?

Gold, silver currency and jewellery
Cash or its equivalent such as bonds, shares of joint companies etc.
Rented buildings, plants (factory), and fixed capital
Commercial assets such as inventories, work in process etc.
Livestock
Agriculture and farm produce
Honey and animal products
Mining and fishing
Almsgiving on self, Zakat al-fitr (Zakat that is paid at the end of the Ramadan before the eid prayers).

What is the minimum amount of Zakat that needs to be paid?

The minimum amount of Zakat that Muslims need to pay is 2.5% of the wealth which they have held for a full lunar year. However this is only if that wealth is above a threshold known as the nisaab level. The nisaab level and minimum amount payable varies according to the type of wealth, which is illustrated clearly in the table below. Zakat is not due on on your home or personal transport.

Zakat is not compulsory on harvest if the total is below the nisaab of about 653 kg (1,440 lb) in crop weight, nor on gold less than 85 g (3.0 oz) of gold or less than 595 g (21.0 oz) of silver.

It states in the Qur’an that Zakat should be paid on receiving income:

...eat of their fruit in their season, but render the dues that are proper on the day that the harvest is gathered. [Qur’an 6:141, Sura Al-An’am]

Zakat must be paid on anything that you have had in your possession for a complete lunar year, and must be paid at the end of the lunar year.

Minimum Values of Nisaab

Type of Wealth	Nisaab level	% Zakat Due
Agricultural and farm produce	(653 kg) per harvest (5 Awsuq)	5% for irrigated land; 10% for rain-fed land
Gold, Silver, precious jewellery of gold and silver	85 grams of gold or 595 grams of silver	2.5%
Cash in bank or in hand	Equivalent value of 595 grams of silver	2.5%
Trading Goods	Equivalent value of 595 grams of silver	2.5%
Cows & buffaloes	Total of 30	A 1 year old in every 30, or a 2 year old in every 40
Goats & Sheep	Total of 40	1 for first 40, 2 for 120; 3 for 300, additional 1 for every 100.
Produce of mines	Any quantity	20% of value of produce

Who is entitled to Zakat?

There are 8 groups of people who are entitled to receive Zakat:

A Needy Muslim (Fuqara)
Extremely poor (Al-Masakin)
The administrators of Zakat (Aamileen)
Those who are new to Islam (Muallafatul Quloob)
Freeing captives (Ar-Riqaab)
Those in debt (Al Ghaarimeen)
In the way of Allah (Fisabil Allah.)
Wayfarer (Ibnus-Sabeel)

As a general rule, the recipient must be a living Muslim whose wealth is below the nisaab level. Those who possess wealth above the nisaab level and do not pay Zakat are seen as wrong doers in the eyes of Allah.

Calculating Zakat

A Muslim will only be required to pay Zakat if he or she has full and legal ownership of an asset. It is payable only on those assets that are acquired for the purpose of creating or generating wealth, such as livestock or crops that are traded or sold, goods used for trading, and investments such as gold or securities that have potential for value.

Zakat is calculated on all Zakatable assets and savings after one full year has passed.

The easiest way to do this is to set a date and work it out one year from then. For example, at the beginning of the year, you have £50,000 in your savings, but at the end of that year, you only have £15,000. Total Zakat due is 2.5% of £15,000 = £375.

Definition of Hawl

The Hawl is defined as the length of time for each 'Zakatable' asset to become worthy of Zakat. This is one lunar year or 355 days. After this time, Zakat becomes compulsory.