Zakat FAQ
Zakat is the third pillar of Islam. This graceful charitable giving represents the unbreakable bond between members of our community, whom Prophet Muhammad (peace and blessings be upon him) described to be “like the organs of the body, such that if one [organ] suffers then the others rally in response.” The Mosque Foundation has been helping thousands of Muslims fulfill this important pillar of Islam, and their Zakat contributions have helped many needy families.
Here you will find brief answers to frequently asked questions about Zakat. These answers are concise, and if you want more explanations, then we encourage you to speak to your Imam. To calculate your Zakat, you’ll also find here our Zakat Calculator. Both the Calculator and the answers to the questions are based on respected Fiqh references, and they were reviewed and approved by Muslim scholars.
When is Zakat due?
Zakat is due after one lunar (hijri) year starting from either the first day you acquired the amount of Nisab or the day you paid your Zakat last year. Zakat becomes a religious obligation upon a Muslim after a time span of one lunar year passes while he or she owns the Nisab. And if you always possess the minimum Nisab value, then Zakat is due once every year at a date of your choosing.
What is Nisab?
Nisab is a minimum amount of wealth you must own in order to be liable to pay Zakat. It is estimated at 3 oz of pure gold. The current Nisab value is $5055
I really don’t keep track of whether or not I have owned the Nisab for the complete year or when I did precisely. The value of what I own varies throughout the year. What should I do?
Since most Muslims in the USA own at least the value of Nisab, you don’t have to keep track of when you acquired this amount. Also, since you are encouraged to give in charity more than the minimum obligatory Zakat, you should then assume that you have always been in possession of the Nisab value. Therefore, to simplify matters, chose a specific date of the lunar calendar of every year, calculate the total value of your Zakatable wealth on that date, and give 2.5% of it (or the rate that applies to the type of wealth you own).
What is Zakatable wealth?
Zakatable wealth is what you own, whether in your possession or with others, except for the properties and belongings that you use, such as your house, car, clothes, and business equipment. Also, Zakatable wealth is what remains with you after meeting the needs and expenses of yourself and your family. It is not based on the income you make during the year. Rather, it is based on what remains with you after you take care of your family expenses. This wealth can be in the form of cash, gold, stocks, business commodities or other wealth.
Don’t I have to possess the amount of Zakatable wealth for a complete lunar year before I have to pay Zakat on it?
No. You must only possess the value of Nisab for the whole year. Therefore, as long as you have a minimum amount of Nisab for the year, you evaluate your Zakatable wealth on your Zakat due date, regardless of when you acquired this wealth or part of it.
How do I calculate the Zakat I owe?
The Mosque Foundation provides you with a Zakat Calculator covering most common Zakatable assets for people living in America. This calculator is based on respected Fiqh references and reviewed by Muslim scholars. However, it does not cover every Zakatable item; so please consult Muslim scholars for other items not mentioned here. We encourage you to calculate your Zakat using our calculator and paying it online so that we may disperse it to qualified recipients.
I loaned a friend $3,000, and it is due in six months, do I have to pay Zakat on this amount?
Although the amount of the loan is not yet in your possession, you still own it. So you still have to pay Zakat on it if you expect it back (good loan). However, if the loan is due and you asked for it and the borrower can’t pay you back (bad loan), you are not required to pay Zakat on it until it is in your possession. Once you receive it, you pay Zakat on it for one year only.
I have a grocery store, what Zakat do I have to pay?
You do not pay Zakat on your equipment, such as refrigerators, cashier machines, and other useable equipment and tools. Even if you own the store property, you don’t pay Zakat on it. However, you must pay Zakat on the wholesale price of all inventories and on other Zakatable assets mentioned in the worksheet.
I have a service provider company and all I have there are computers and other equipment that I use. How do I pay my Zakat?
There is no Zakat due on the value of the equipment you mentioned, since they are used for business. But because you own this company, you should combine your Zakatable wealth with that of the company. The Zakat would be payable on what you own in Zakatable wealth after a full year of meeting your expenses and those of the company’s.
