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With the onset of Ramadan, great changes take place among the Muslims. Not only are they engaged in the worship of Allah Almighty, but in this blessed month, they try their best to help the poor and needy in every possible way.
In this month, Muslims usually pay Zakat, although the payment of Zakat is not directly related to Ramadan, because Zakat is paid when the potential wealth is more than one year, but it is common in our society. It has become a custom that Zakat is paid only during the holy month of Ramadan, because today we know about Zakat.
What is Zakat?
Zakat is the third pillar of Islam. It is an obligatory act of charity amounting to 2.5% of a Muslim’s annual savings. Zakat is intended to purify our wealth, not only physically, but also spiritually. It purifies our heart against selfishness as well as ensuring that society’s poorest are protected against hunger and destitution.
A common misconception is that Zakat is a form of tax. However, it is a spiritual obligation in which we will be accountable to Allah directly. Zakat plays a key role in supporting the poorest in the community, through providing them with essential aid as well as helping them come out of a life of poverty.
Importance of Zakat
Zakat (alms) is one of the five pillars of Islam. Its importance can be realized from the fact that in 82 verses of the Qur’an Zakat is associated with prayer (Salah), such as:
Establish regular prayer and give Zakat; and obey Allah and His messenger. Quran (33:33)
If social justice and compassion to fellow humans who are disadvantaged is one of the central themes in the message of Allah to humanity, then it is no wonder that Zakat, like prayer and fasting, was also enjoined upon the people of the past messengers:
And We made them (descendants of Abraham) leaders, guiding by Our command, and We sent them inspiration to do good deeds, to establish regular Prayers and to practice Zakat; and they constantly served Us. Quran (21:73).
How do I calculate how much Zakat I need to pay?
We know that calculating your Zakat can be a daunting task if you don’t know how to go about the process correctly. There are so many variables to consider so we’ve devised a simple Zakat calculator to help you calculate what you’re due to pay.
Who has to pay Zakat?
You must pay Zakat if, firstly, you are an adult Muslim of sound mind, and secondly, you have possessed the minimum amount of wealth (known as Nisab) for one lunar year.
Nisab must be maintained for one lunar year for Zakat to be required and must be paid as soon as it is due. Your Zakat year therefore starts on the date your wealth first equalled or exceeded the Nisab and should be calculated on that date for each subsequent year.
Zakat should be paid on wealth rather than income. If we take the example of Adam (our fictional character) who earns £20,000 a year and has £200 pounds as part of his yearly savings, Adam would have to calculate his Zakat from the £200 in his savings as opposed to his yearly income.
Zakat is not just paid on the savings in your bank account. You need to pay Zakat on other types of wealth, such as:
Gold and silver.
Cash held at home or in bank accounts.
Stocks and shares owned either directly or through investment funds.
Money lent to others.
Business stock in trade and merchandise.
Agricultural produce.
Livestock animals such as cows, goats and sheep.
Pensions.
Property owned for investment purposes.
