Zakat (Almsgiving)

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Zakat (زكاة) is the third pillar of Islam — a compulsory charitable levy of 2.5% on specific types of wealth held for one lunar year by a financially able Muslim.

Key Facts for Qimiyah Exam (Saudi):

• Zakat is Fard (obligatory) on four categories: gold/silver, commercial goods, agricultural produce, and livestock (nisa’).
• Nisab thresholds: Gold = 85 grams; Silver = 595 grams; Cash/commercial goods = equivalent value of 85g of gold.
• Zakat year (Hawl) = 1 lunar year (approx. 354 days), not solar year.
• Recipients (Mustahiq): 8 categories listed in Surah At-Tawbah 9:60 — the poor, the needy, Zakat collectors, new converts, captives, those in debt, Allah’s cause, and the traveller.
• Zakat al-Fitr (Sadaqat al-Fitr): Wheat, barley, dates, or raisins equivalent to approximately 3 kg per person; payable before Eid al-Fitr prayer. This is distinct from Zakat al-Mal.

⚡ Exam tip: The Nisab threshold and the 2.5% rate for gold/silver/cash are among the most frequently asked questions. Also know the difference between Zakat al-Mal and Zakat al-Fitr.

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Definition and Legal Status

Zakat linguistically means “purification” and “growth.” In Shari’ah, it refers to the specific portion of wealth that Allah has ordained to be given to designated recipients. The Quran describes it as accompanying prayer: “And establish prayer and give Zakat” (Surah Al-Baqarah 2:43).

The giving of Zakat is a means of:

1. Purifying the soul from greed and attachment to wealth
2. Purifying wealth itself — wealth that is not shared stagnates
3. Redistributing wealth to reduce economic inequality
4. Serving the poor and community welfare

Conditions (Shurut) of Zakat

Zakat becomes obligatory when ALL of the following are met:

1. Islam — Zakat is only obligatory on Muslims. Non-Muslims do not pay Zakat.
2. Freedom — A slave is not required to pay Zakat (in classical fiqh).
3. Ownership (Milkiyyah) — The wealth must be genuinely owned by the person.
4. Full ownership — The wealth must be in the person’s complete control without legal impediment.
5. Nisab — The wealth must equal or exceed the minimum threshold (Nisab).
6. Hawl (Complete Lunar Year) — The wealth must have been possessed for one full lunar year (for gold, silver, and cash). Agricultural Zakat is due immediately upon harvest.
7. Debts — Debt owed to others reduces the net wealth subject to Zakat.
8. Ability (Istiqlal) — The basic needs of the person and their family must be met.

Categories of Zakat

1. Zakat on Gold and Silver

Any gold or silver jewellery, bullion, or currency (if backed by gold/silver) exceeding the Nisab threshold is subject to Zakat.

• Rate: 2.5% (1/40) per lunar year
• Nisab (gold): 85 grams of pure gold (or its cash equivalent)
• Nisab (silver): 595 grams of pure silver (or its cash equivalent)

Example: If a person owns 100g of gold for one full lunar year, and gold’s market price is SAR 300/g, the Nisab is SAR 25,500. Zakat = 2.5% of the gold’s value = SAR 750.

2. Zakat on Commercial Goods (Zakat al-Tijarah)

Goods purchased for the purpose of resale (merchandise) are subject to Zakat at 2.5%, calculated on the current market value of all goods.

Method: At the end of the Zakat year, take the total value of goods, add cash on hand, subtract debts owed, then calculate 2.5% of the remainder.

3. Zakat on Agriculture (Zakat al-Khubz wa al-Zara’)

• Rate: 10% if watered by rain/natural means; 5% if watered by artificial irrigation (wells, pumps).
• Nisab: Approximately 653 kg of wheat (or equivalent value) — the amount that feeds a family of five for a year.
• Due: Immediately upon harvest, without waiting for the Hawl.

4. Zakat on Livestock (Zakat al-Nisa’)

The classical category includes camels, cattle, and sheep/goats. This is less commonly examined in the Qimiyah context but remains part of the syllabus.

Animal	Nisab	Rate (per excess)
Sheep/Goats	40	1 sheep/goat
Cattle	30	1 cow per 30
Camels	5	1 camel per 5

5. Zakat on Income and Salaries

Contemporary scholars differ on whether annual income beyond basic needs is subject to Zakat. The majority of Saudi scholars (following Ibn Taymiyyah) hold that if savings from income reach the Nisab and complete a Hawl, Zakat is due on them at 2.5%.

Recipients of Zakat (Mustahiq)

The Quran specifies eight categories in Surah At-Tawbah 9:60:

1. Al-Fuqara (The Poor) — Those whose wealth is below the Nisab
2. Al-Masakin (The Needy) — Those in severe deprivation even if not technically below Nisab
3. Amil al-Zakat (Zakat Collectors) — Officials appointed to collect and distribute Zakat
4. Muallafat al-Qulub (New Converts) — To strengthen the faith of recent Muslims
5. Ar-Riqab (Captives/Slaves) — To free those in bondage
6. Al-Gharimin (Those in Debt) — Those who cannot repay legitimate debts
7. Fi Sabil Allah (In Allah’s Cause) — For Islamic causes: jihad, mosques, schools, infrastructure
8. Ibn al-Sabil (The Traveller) — Those stranded during travel

Forbidden recipients: A wealthy person, a non-Muslim, the Prophet’s family (Bani Hashim), and the dependent family members of a person who is himself a Mustahiq.

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🔴 Extended — Deep Study (3mo+)

Comprehensive coverage for students on a longer study timeline.

Advanced Zakat Calculations and Contemporary Issues

Zakat Calculation Formula

Net Zakatable Wealth = 
  (Cash + Bank Balances + Investments + Gold/Silver Value + Market Value of Commercial Goods)
  MINUS (Debts Owed to Others)
  
Zakat Due = Net Zakatable Wealth × 2.5%

Worked Example: A person has: SAR 50,000 in savings, 90g of gold jewellery, SAR 20,000 in business inventory value, and owes SAR 10,000 in a personal loan.

• Gold value at Nisab: 90g × SAR 300 = SAR 27,000
• Total wealth: SAR 50,000 + SAR 27,000 + SAR 20,000 = SAR 97,000
• Minus debt: SAR 97,000 − SAR 10,000 = SAR 87,000
• This exceeds the Nisab (85g × SAR 300 = SAR 25,500), so Zakat is due.
• Zakat = SAR 87,000 × 2.5% = SAR 2,175

The Zakat Year (Hawl) — Critical Timing Rules

The lunar year (Hawl) is strictly lunar, not solar. One lunar year = 12 lunar months ≈ 354 days.

Key points:

• If wealth falls below Nisab during the year but later rises above it, the Hawl resets from the date it reached Nisab.
• When wealth is inherited, the new owner starts a new Hawl from the date of inheritance.
• A person can choose any date as their Zakat year-end (e.g., the date of receiving salary), as long as it is consistently applied.

Zakat vs. Sadaqah — Key Distinctions

Feature	Zakat	Sadaqah (Voluntary Charity)
Obligation	Fard (compulsory)	Mustahab (recommended)
Amount	Fixed (2.5% for wealth)	Any amount
Recipients	8 specified categories	Anyone in need
Time	Annual (Hawl-based)	Anytime
Penalty for non-payment	Sin + accountability	Only sin
Collectibility	Can be enforced by state	Cannot be forced

Zakat al-Fitr — Sadaqat al-Fitr

Often confused with Zakat al-Mal, Zakat al-Fitr is a completely separate obligation:

• Amount: Approximately 3 kg (or value equivalent) of staple food (wheat, barley, dates, raisins) per person, including dependants, servants, and even the unborn child.
• Time: Payable from the night before Eid al-Fitr until the Eid prayer. It is SUNNAH to pay before going to the Eid prayer; it becomes Wajib if delayed.
• Purpose: To purify the fasting person from idle talk and to ensure the poor have a dignified Eid.
• Recipient: The same eight categories as Zakat al-Mal, though most scholars allow giving it to the poor specifically.

Contemporary Issues in Zakat

1. Cryptocurrency and Digital Assets: The Saudi Zakat Authority (ZATCA) and other Islamic scholars have debated whether cryptocurrencies are subject to Zakat. The prevailing view is that if cryptocurrency is held as a currency or investment (like gold), Zakat at 2.5% applies. If it is merely a speculative asset, the ruling is still under discussion.

2. Stocks and Shares:

• Trading stocks (for quick resale): Treated as commercial goods (Zakat al-Tijarah) — 2.5% on market value.
• Long-term investment stocks: Many scholars hold that only the dividend (not the principal) is subject to Zakat if it is distributed as cash savings.
• The ZATCA in Saudi Arabia requires Zakat on the market value of shares held for trade.

3. Zakat on Retirement Savings (Pension/EPF): Scholars disagree. If the savings are considered a debt owed to the person by the employer, some scholars apply Zakat at 2.5% on the accumulated amount; others exempt pension savings.

Practice Questions for Qimiyah Exam

1. A person has owned 82g of gold for 10 months. After 2 more months, will Zakat be due? Calculate if gold is SAR 280/g and Nisab is 85g.
2. What is the difference between Zakat al-Fitr and Zakat al-Mal in terms of: amount, time, obligation, and recipients?
3. Can a person give their Zakat to a close relative who is poor? What is the scholarly opinion?
4. A farmer harvested 1,000 kg of wheat using a tube well (artificial irrigation). How much Zakat is due?
5. Who among the following can receive Zakat: (a) a millionaire’s son, (b) a non-Muslim charity, (c) a person building a mosque, (d) a person in unmanageable debt?

Common Mistakes to Avoid

• Calculating Zakat on the original cost of goods rather than current market value — for commercial goods, the current resale value is used.
• Forgetting to subtract debts from total wealth — debts reduce the Zakatable amount.
• Confusing Nisab for gold (85g) with Nisab for silver (595g) — the higher of the two that applies to one’s wealth determines the threshold.
• Thinking Zakat al-Fitr can be paid in cash equivalent — the preferred view is to give actual food; cash is permissible according to many scholars but not the most preferred.
• Neglecting the lunar calendar — the Hawl is lunar, not solar. Using solar dates will result in incorrect timing.

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