Zakat Donations Guide

Who is Eligible to Receive Zakat?

Zakat expenditures are only for the poor and
for the needy and for those employed to collect
Zakat and for bringing hearts together [for
Islam] and for freeing captives and for those
in debt and for the cause of Allah and for the
traveller - an obligation by Allah. And Allah is
Knowing and Wise.
(Al Qur’an 9:60)

In these divine verses of the Qur’an Alla (swt) has set the eight categories of recipient for Zakat, as follows:

1. The Poor (in dire need prevented from asking)
2. The Indigent (whose destitution drives them to ask)
3. Those Administering Zakat’s collection and distribution
4. Those whose hearts are to be reconciled
5. Those in bondage (slaves to be freed and captives)
6. The Debt-Ridden
7. In the Cause of God
8. The Wayfarer (stranded, displaced, or cut off from resources while travelling)

What is Nisab?

Nisab value means the threshold at which Muslims become eligible to give Zakat. That threshold defines the minimum amount of personal wealth you must be in possession of for a full lunar year in order to be eligible to pay Zakat.

Two values are used to calculate this threshold: the current monetary value of 87.48 grams of gold and of 612.36 grams of silver. When working out the amount of Zakat you need to pay, the amount is the worth of the precious metal on the date of the calculation, which applies to the full Islamic lunar year or ‘Hawl’. Hawl is an Islamic term for the lunar year.

Zakat payments must be made once every Hawl from the date your total wealth exceeded the nisab value. Note: your wealth must have remained above the threshold for an entire lunar year for you to be eligible to pay Zakat. If your wealth drops below the nisab value before the lunar year ends, you will no longer be eligible to pay Zakat.

If your wealth changes, you will have to adjust your Zakat to ensure you are paying the correct amount.

How to calculate your Zakat

Now you know about the minimum threshold / nisab of wealth you must possess to pay Zakat, you need to work out how much you need to pay.

Use our quick easy Zakat Calculator, or follow these guidelines:

Zakat is fixed at 2.5% of your personal money and any assets you hold, minus your short term liabilities.

Assets that are eligible include:

• Cash in savings, at home or in a bank
• Money raised and set aside for property, weddings, hajj, or anything else
• The total value of gold and silver you own
• The full value of any held shares at market value
• The complete value of all business stock you own
• Rental income from property you own
• Any lent money in debt to you that you expect returned.

Your personal finances and assets mean your total wealth. However, essential items for comfortable day-to-day life are exempt from this total. These include the home you live in and your main car (although Zakat is due on any additional vehicles/properties you own).

Zakat FAQ

• Can I pay my Zakat in instalments?

  A Yes, you can, and you can pay in regular monthly payments and a direct debit if you want to pay your Zakat in smaller instalments. We have the facility to process this on the Mohiuddin Trust Zakat Fund page.

• Do I Pay Zakat on my Children’s Wealth?

  Not according to the Hanafi school. A child is not liable to pay zakat, even if they possess wealth above the nisab threshold. The first zakat payment will become due twelve lunar months after the child reaches the age of puberty, if they possess wealth above the nisab.

  According to Imam Shafi’ and Imam Malik, however, a child who possesses wealth above the nisab value is liable for zakat, the same as an adult.

• Can I Pay Zakat as a Couple?

  No, in Islam, the financial assets of a wife and a husband are considered separate, and both are potentially eligible to pay Zakat.

• When Does the Zakat Year Begin?

  The Zakat year begins on the date upon which your wealth exceeded the nisab. Upon the first anniversary of this date, it will be time to calculate and donate your Zakat

• I owe several years Zakat, what should I do?

  If you have failed to pay Zakat for some reason, you should address this as soon as possible, but the solution is simple: calculate 2.5% of the wealth you held at the end of each year (estimated to the best of your ability if necessary)

• Is there a difference between Zakat and Sadaqah?

  Yes, Zakat is obligatory for every Muslim, while Sadaqah, although encouraged, is a voluntary form of charity or donation. Zakat is also fixed onto a specific value in relation to currency, whereas Sadaqah can be anything at all that is a gift to the world.

• What is Zakat al Fitr?

  Malak Zakat al Fitr or Sadaqah al Fitr is a charitable donation for the needy, made on the festive celebration of Eid al Fitr at the end of the holy month of Ramadan. It is a requirement of every Muslim, solong as they are in receipt of the means to pay.

  The head of the family may pay the required amount for all members. It should be paid during Ramadan before the month ends and before the Eid prayers at the latest. This is a specific time-frame that all Muslims must adhere to. Late payment will not be valid and the obligation cannot be compensated. It is measured as an amount which the Prophet Muhammad, peace be upon him, described as one saa’ of food. One saa’ = four madd. One madd = the amount that can be scooped up when one puts their hands together. If we translate this into a monetary value based on the price of staple foods such as flour or rice, it is approximately £5 per person in 2022.