Zakat: The Central Pillar of Islam
Zakat is not just a pillar of Islam—it is the central pillar, connecting you to Allah and serving as the fund for the development of Islam and the upliftment of the Muslim Ummah. It fosters unity between the giver and the receiver, ensuring both are spiritually and financially enriched.
How to calculate your Zakat
Step 1. Determine Your Zakatable Assets:
• Cash: In hand and in bank accounts
• Gold and Silver: Current market value
• Investments: Stocks, shares, and other investment portfolios
• Money Owed to You: Loans expected to be repaid
• Other Savings: Pensions, ISAs, and trusts
• Cryptocurrencies: e.g., Bitcoin and other digital currencies
• Business Assets:
i. Cash on hand
ii. Receivables (money owed to the business)
iii. Stock/inventory value
i. Cash on hand
ii. Receivables (money owed to the business)
iii. Stock/inventory value
Total Zakatable Assets
Step 2. Subtract Current Liabilities:
• Personal Debts: Money you owe
• Other Outgoings Due:
i. Utility bills
ii. Credit card payments
iii. Overdrafts, etc.
i. Utility bills
ii. Credit card payments
iii. Overdrafts, etc.
• Business Liabilities: Any outstanding debts or obligations
Total Current Liabilities
Step 3. Calculate Your Net Zakatable Assets:
Total Zakatable Assets - Total Current Liabilities = Net Zakatable Assets
If your Net Zakatable Assets exceed the Nisab [threshold (Gold – 87.48 grams, Silver – 612.36 grams)], calculate:
Net Zakatable Assets × 2.5% = Your Zakat Payment
Total Zakatable Assets - Total Current Liabilities = Net Zakatable Assets
If your Net Zakatable Assets exceed the Nisab [threshold (Gold – 87.48 grams, Silver – 612.36 grams)], calculate:
Net Zakatable Assets × 2.5% = Your Zakat Payment
Note: Personal belongings, such as your home, car, and clothing, are exempt from Zakat.
Categories of Zakat:
Zakat is a restricted fund, meant exclusively for the following specified categories as per the Qur'an [9:60]:
• The Poor — those in absolute and extreme poverty, with neither material possession nor any means of livelihood.
• The Needy — those with insufficient means to sustain themselves and families.
• Zakat Administrators — those appointed to collect, manage and distribute the Zakat fund.
• Reconciling Hearts — those whose hearts are to be comforted.
• Freeing Slaves — those who are held captives unjustly.
• Those in Debt — who are struggling to repay.
• In the Path of Allah — those working for the Cause of Allah
• The Stranded Travellers — those who are stranded i.e. refugees etc.
Key Principles:
Zakat is the need of the hour — pay early if there is a pressing need. A faith-based charitable contribution and an economic tool — a wealth tax promoted by economists.
The Vision:
Establish the Bayt al-Maal to preserve wealth, redistribute fairly, and empower the needy.
If you need any more information or help with regards to calculating your Zakat or if you have missed your Zakat in the past and need assistance for it, please write to us: info@aldinar.org
Thank you!