Zakat - Obligatory Charity in Islam

The Alms Tax for Muslims

Giving charity in the form of zakat is one of the five pillars of faith in Islam. Annual almsgiving is incumbent on all Muslims who own a minimum amount of wealth. 

 

All Muslims are required to pay an annual charitable tax called zakat (also zakah). The word zakat is derived from the Arabic verb zaka, which means "to purify" or "to grow." Paying zakat, then, is a way for Muslims to purify their wealth by giving some of it away in charity.

In addition to paying zakat, Muslims may further purify their wealth through sadaqa, or voluntary charity.

 Nisab and the Requirements of Zakat

 

 

Zakat is an obligatory charity for Muslims and is one the five pillars of faith in Islam. Any Muslim who owns nisab – a minimum amount of wealth or property which has been in his possession for a year – is required to pay an alms tax on it. According to Islamonline.net, the minimum value of nisab in the United States is approximately $1000 USD.

 

Nisab does not include personal possessions such as a primary residence, furniture, car, clothes, and books, but it does include savings, jewelry, livestock, business income and inventory, stocks, gold, silver and other investments.

 Calculating Zakat

Zakat is typically calculated at of 2.5 percent of one's personal and business assets after family and personal expenses have been deducted. Other zakat rates apply to the value of crops (5 to 10 percent) and to oil and precious metals (20 percent) found on one's own land.

When to Pay Zakat

Many Muslims regard Ramadan as the best time to pay zakat because the rewards for giving charity are greater during this month. However, Muslims can pay zakat any time in the year in which it is due, and some consider this preferable since the needs of the poor are not confined to a single month.

 

Zakat may be given in one lump sum or divided over a period of time. Similarly, it may be given to a single recipient or distributed to a number of different people.


 Who May Receive Zakat

It is the responsibility of a Muslim state to collect and distribute zakat to the needy, but mosques, Islamic institutions, and other Islamic groups may provide this service. Zakat differs from a tithe, however, in that a Muslim calculates his own zakat and he may give it directly to a poor person or other eligible recipient.

Those eligible to receive zakat include the poor, the destitute, those who work for a zakat fund, new Muslims or those inclined towards Islam, slaves (to purchase their freedom), travelers who are stranded without money, someone who is in debt, or a person or cause dedicated to the way of Allah.

While it's preferable to pay zakat to a relative, it's not permissible to pay zakat to someone whom one supports in a time of need such as a parent, child, or grandparent. It's also not permissible to give zakat to someone whose own means are sufficient.

Zakat al-Fitr
 

In addition to the annual alms tax, Muslims also pay Zakat al-Fitr (also called Sadaqa al-Fitr), valued at the quantity of food (or its equivalent) required to feed a person for one day.

Each head of household makes zakat al-fitr donations on behalf of himself and each of his dependents. Zakat al-Fitr should be given on the last day of Ramadan, enabling fasting Muslims to earn reward by feeding the needy, and providing the poor with food to enjoy the holiday (Eid al-Fitr) which marks the end of Ramadan.

Zakat al-fitr, like zakat, is a religious obligation incumbent on those Muslims who own the minimum amount of wealth. Islam views such charity as a right which the poor can expect from the more fortunate. Wealth and provisions are bounties from Allah which are held in trust, and therefore should be shared with the less fortunate.