As an adult Muslim who owns wealth above the Nisab and is required to pay Zakat, you recognize the importance of this sacred act of worship and want to make sure you donate the exact Zakat required.
Calculating and contributing to pay Zakat can be pretty intimidating – especially when keeping track of the changing Nisab value. Fortunately, MWC’s Zakat Calculator makes it a whole lot easier to calculate and donate your zakat.
In this blog, we dive into how calculating Zakat actually works, allowing you to determine who is eligible to pay Zakat, who is eligible to receive Zakat, and how your Zakat helps support and save lives of Muslims, refugees, and other beneficiaries all around the world.
Who Must Pay Zakat?
Zakat is one of the five pillars of Islam and a crucial aspect of our devotion to Allah. Our Zakat helps improve the lives of people in need all over the world. But who is considered poor, and who is considered wealthy when it comes to the obligation of Zakat?
Zakat must be paid by anyone whose overall wealth, which includes assets, reaches the Nisab. Nisab can be calculated by the value of silver or gold. According to most scholars, this is the value of 613g of silver (approx $617.43) and 88g of gold (approx $6593.38). On the day your wealth reaches or surpasses the Nisab rate, you must note the Islamic Hijri Date (based on the Lunar Calendar). After an entire Lunar Year passes, if your wealth still reaches or surpasses the Nisab, you now have to pay Zakat as a religious obligation.
But don’t forget, the Nisab you judge your wealth against after a year has to be the latest Nisab value and not what you initially reached a year ago.
Who is Zakat Eligible?
Now we’ve got that figured, we need to find out who is Zakat eligible, to ensure you donate your Zakat only to those with a recognized right to receive it.
There are 8 categories who hold this recognized right, and they are mentioned in the Holy Quran.
“Alms tax is only for the poor and the needy, for those employed to administer it, for those whose hearts are attracted to the faith, for free slaves, for those in debt, for Allah’s cause, and for needy travelers. This is an obligation from Allah. And Allah is All-Knowing, All-Wise.” (Surah At-Tawbah 9:60)
The 8 Categories Who Receive Zakat
Based on the verse mentioned above, the following eight categories are considered valid beneficiaries of your Zakat donation.
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Fuqara
The Poor who are in a state of poverty and cannot meet their basic needs.
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Masakin
Those who are in need and in a state of difficulty.
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Al-Aimilin
Those who are appointed to collect and distribute Zakat are entitled to a portion of it as compensation for their services.
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Mu’allafat Al-Qulub
Those whose hearts are to be reconciled. Individuals who may be inclined toward Islam or whose hearts are to be reconciled by the Muslim community.
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Ar-Riqab
Freeing Captives – Zakat can be used to help free those who are enslaved or held in captivity.
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Al-Gharimin
Debtors who are in debt and cannot repay it.
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Fi Sabilillah
For the cause of Allah, supporting activities that benefit the Muslim community.
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Ibnus-Sabil
Wayfarers, Travelers, or strangers who need assistance.
Calculating Your Zakat
Now that we know how one becomes obliged to pay Zakat and who is eligible to receive Zakat, we need to figure out how to calculate our Zakat donations.
Calculating Zakat is straightforward. First, determine if your wealth exceeds the Nisab threshold for a full lunar year. Include assets like savings, investments, gold, silver, and business merchandise. Deduct any debts or immediate liabilities from this total. What’s not counted are personal items like your home, car, or daily use items.
If the remaining sum exceeds the Nisab, simply calculate 2.5% of this total – that’s your Zakat. It’s a simple yet significant act that fulfills a key pillar of our faith and reinforces our commitment to support those in need in our community. Remember, Zakat purifies our wealth and nourishes our souls.
MWC’s Zakat Calculator
MWC proudly introduces our user-friendly Zakat Calculator. This handy tool simplifies your calculation process, ensuring accuracy and adherence to Islamic principles. Just input your relevant financial details, and our calculator will swiftly determine the exact amount of Zakat you need to pay. It’s a convenient way to uphold this essential pillar of Islam and extend your support to those in need with MWC.
MWC’s Zakat Advisor
We’re excited to announce that Mufti Yusuf Badat, a respected Islamic scholar and community leader, has joined Muslim Welfare Canada (MWC) as our Zakat Policy Advisor. His deep understanding of Islamic law and years of dedication to community welfare make him the perfect fit to oversee how we distribute Zakat. With Imam Badat on board, you can be confident that your Zakat donations are handled and used in a way that fully respects Islamic teachings, bringing both transparency and trust. MWC’s dedication to helping those in need, now strengthened by Imam Badat’s expertise, assures that your Zakat contributions will truly make a difference in the lives of those less fortunate.
Frequently Asked Questions
How do I calculate my Zakat?
Calculate your total wealth, excluding expenses, and then determine the threshold using our Zakat Calculator. If your wealth reaches or exceeds the Nisab value and remains as such after one Islamic (Lunar) year, then you work out 2.5% of your wealth and pay that amount as Zakat.
How can I adapt to Nisab fluctuations when calculating Zakat?
It is important to check the Nisab rates when acquiring wealth and to make a note of the Islamic date on which your wealth surpasses the Nisab rate. Then, after one Lunar year passes, you must check the latest Nisab rate of that day to see if your wealth still reaches or is above the Nisab. If this is the case, then you must pay Zakat.
