Whether you don’t know anything about it or you’ve got the basics but want some clarification on the finer points, this Q&A should help to improve your understanding of Zakat.
What is Zakat?
As the charity Human Appeal UK points out on its website, Zakat is a compulsory act of worship for Muslims that involves giving approximately 2.5 percent of their wealth at the end of the lunar year to those in need. It’s considered to be a religious duty that cleanses impurities and helps to ensure excess wealth is distributed among the poor.
Who pays Zakat?
Muslims are required to pay Zakat once they reach puberty as long as they are of sound mind and have reached the minimum level of wealth (known as the Nisab).
What is the Nisab threshold?
The value of the Nisab is traditionally the equivalent of 612.36 grams of pure silver or 87.48 grams of pure gold. However, because of the big difference in the value of these metals, the Nisab for silver is now considerably lower than for gold. Either value can be used, but many scholars recommend sticking to silver because this means that many more people are eligible to pay Zakat.
Human Appeal noted that the Nisab based on the value of silver equated to approximately £235 last year. So, if the assets you own that are subject to Zakat exceed this sum, you are eligible to make a payment.
If your Zakatable wealth drops below the Nisab during the lunar year, it’s recommended that you take the value at the beginning of this period and again at the end. If both values are above the Nisab, you should pay Zakat.
What should you pay Zakat on?
Assets that Zakat should be paid to include precious metals (including jewelry and ornaments), money in bank accounts, stocks and shares, the money you’ve lent to others, business stock, pensions and investment properties. The simplest way to work out how much to pay is to add the value of these assets and then calculate 2.5 percent of this total.
Bear in mind that you don’t have to pay this levy on the home you live in, cars owned for personal use, debts owed if you’re not confident of repayment, furniture and household items or jewelry that doesn’t contain precious metals or stones.
You can discover more about Zakat by visiting the Human Appeal website. You’ll also find out about the projects the charity is funding, and you can get the lowdown on upcoming Human Appeal events.