Zakat In Islam

What is Zakat in Islam? 

Zakat is one of the five pillars of Islam and is considered “wajib”, or a must for Muslims. In Malaysia, you can actually get jail time or be forced to pay a hefty fine for not paying your zakat on purpose (under the Syariah Criminal Enactment law of each state), so to our Muslim readers, no skiving on your zakat payments!

Zakat is a compulsory payment  for charity by Muslims only, and is calculated from their acquired wealth, or income. Fun fact about zakat : In some cases (for farmers, etc) crops and livestock can be used as payments for zakat! In Malaysia, zakat falls under the state legislation and each state has different rates and methods of calculation to determine the zakat amount that muslims have to pay.

Conditions of Zakat (and some definitions) 

Not all Muslims are required to pay their zakat, depending on wealth and income. Just like our income tax, zakat is obligatory only after you’ve reached a certain amount of wealth, among other things. So Muslim readers, if you pass all of these conditions, you have to perform your zakat duty!

Muslims

Only those who are Muslims have to pay both their yearly Zakat on Wealth and Zakat Fitrah.

Nisab

What is Nisab?

Nisab is the minimum amount of wealth that must be owned by a muslim before he/she is obligated for zakat. It also acts as a measurement that determines the obligation for paying zakat for muslims. As an example, the nisab in Selangor is RM14,065.00 (according to Lemabag Zakat Selangor). So if you’re living in Selangor and your zakatable income is more than RM14,065.00, then you have to pay your zakat!

Nisab Amount for Zakat 

In general, the nisab for zakat on wealth is equivalent to the price of 85 grams of gold.

Nisab Amount for Zakat in Malaysia 

In practise, the nisab amount in Malaysia is between RM13,000 to RM15,000 depending on which state you live in

Fully Owned Wealth / Income

You only need to pay your zakat if you are the sole owner of your wealth and income. For example, if you are an employee, your monthly income fully belongs to you. For a business partnership between a Muslim and a non-Muslim, only the profits from the Muslim partner will be calculated for the zakat payment.

“Cukup Haul” or Wealth must be exactly or more than a year old

For Zakat on Wealth, zakatable income and wealth that is fully owned must be in the payer’s possession for at least a year. If the wealth accumulated has not reached the year-old age, that wealth will not be imposed with Zakat. For example :

Azmah has just graduated and started her first job 5 months ago. Even if her yearly income exceeds the nisab amount, she only needs to start paying her Zakat on Earning after working for a year.

Beneficiaries Of Zakat

Have you ever wondered who the recipients of zakat are? Unlike taxes, zakat is divided and given to those who are in need, and they fall into these categories:

Fakir or The Needy

Miskin or Poor

Amil or The Collector

Muallaf or A Converted Person

Fisabillah

Gharmin

Riqab