When does Zakat become obligatory on me?
In brief, zakat – 2.5% of ones zakatable wealth – becomes obligatory to give once a Muslim adult – man or woman – possesses the niṣāb (zakat threshold) amount of zakatable wealth for one lunar year in excess of his essential belongings and debts.
How much is Zakat?
Zakat is 2.5% of one’s zakatable wealth.
What is “niṣāb”?
The niṣāb (zakat threshold) is calculated at about 87.482 grams of gold (≈$8,100 as of March, 2025) or 612.35 grams of silver (≈$660 as of March, 2025). Once an individual possesses zakatable wealth equivalent to this amount, he will be obligated to pay zakat: 2.5% on the total zakatable amount. It is the position of Darul Ifta, Darul Qasim that either niṣāb may be used in our context.
What is “zakatable” wealth?
Zakat is only due on zakatable assets:
Generally, any other type of wealth does not obligate zakat. For example, paintings, decorative plants, board games, etc.
Do I have to give zakat on my “essential belongings”?
“Essential belongings” are not included in zakat. “Essential belongings” include all essential items such as residence, vehicles, furniture, appliances, and all tools and instruments relating to one’s profession. So, one will not include the value of his home, furniture, cars etc. when calculating his zakatable wealth.
Do I have to give zakat on debts?
Short term debts are subtracted from one’s zakatable assets. Short term debts include all debts to be paid within a given year. Long term debts such as mortgages and car payments will not be subtracted from one’s zakatable assets except for the amount of debt due for a single year. For example, Zayd has a mortgage of $300,000 to be paid over thirty years, with $10,000 being due each year. When calculating his zakat, Zayd will subtract the amount he owes for the year, i.e., $10,000, not the entire amount of the mortgage, i.e., $300,000.
Will I subtract future expenses from my Zakat?
Only expenses already incurred will be subtracted. Future expenses will not be subtracted. For example, Zayd has already spent $1,000 on gas and anticipates he will spend another $200 in the next two months. He will not subtract an additional $200 from his zakat.
How long do I have to possess the wealth before zakat becomes obligatory?
The wealth must be owned at the beginning and end of one Islamic year (regardless of the exact start date). If the wealth fluctuates, even to below the niṣāb, zakat will be obligatory so long as the niṣāb is maintained at the start and end of the yearly-cycle. If the wealth is completely lost at any point before the completion of the year, then the year will restart only after the niṣāb is met again.
For example, Zayd reaches niṣāb on Ramaḍān 1st. As long as he has the niṣāb on the last day of Shaʿbān the following year (i.e., one Islamic year), he will be obligated to give zakat – even if his wealth dropped to less than the niṣāb throughout the year. It is only in the case Zayd becomes bankrupt that he will disregard his previous niṣāb date (Ramaḍān 1st, in this case) altogether.
When is it obligatory on me to give zakat?
Zakat should be given as soon as possible, within one year of becoming obligatory. Delaying zakat without a valid excuse for multiple years incurs sin, and the obligation to pay for all previous years remains. It is permissible to give zakat in Ramadan, whether before or after the due date of one’s annual zakat. However, if a person passes away after zakat becomes obligatory, it must be settled from ⅓ of their estate if bequeathed. Additionally, if the actual zakat amount due exceeds the initial estimate, the difference must be paid.
Can I just estimate how much zakat is due on me?
One must be diligent in calculating their zakat and cannot afford to miss even a dollar’s amount. Overestimating is allowed.
Do I give zakat on my business inventory? If so, what do I base the amount on?
One will pay zakat based upon the selling market price regardless of how high or low it is. Keep in mind that if you sell the item before your zakat year, you will only need to pay zakat on the liquid money you earned.
I initially bought something with the intention of selling it, but now I no longer wish to sell it. Am I obligated to give zakat for it?
If one initially purchases an item with the intention of selling it, but then changes their intention later on, they are not obligated to give zakat for that item.
I initially bought an item with the intention of keeping but now wish to sell it. Am I obligated to give zakat on it?
If one initially purchases an item with the intention of keeping it, but then changes their intention later on, they are not obligated to give zakat for that item until they put it on the market.
I bought something, such as real estate, with the intention of keeping it for some time but also with the intention of definitely selling it either in the future if I am offered a good deal. Do I have to give zakat on this?
If one buys something with the definitive intention of selling it – despite keeping it for the time being – and the possible option of keeping it, they are obligated to give zakat.
I bought something, such as real estate, with the intention of keeping it for some time but also with the intention of perhaps selling it in the future if I am offered a good deal. Do I have to give zakat on this?
If one buys something with the definitive intention of keeping it and the possible option of selling it, they are not obligated to give zakat.
Is there zakat on gold and silver in non-jewelry form (bars, cutlery, raw form, etc.)?
Zakat is due on gold and silver in any form including bars and cutlery.
Is there zakat on jewelry?
Zakat is due on gold and silver jewelry only.
Is there zakat for non-gold and non-silver jewelry?
Zakat is not due on non-gold and non-silver jewelry
Is there zakat on gold and silver jewelry that I do not wear/use?
Zakat is due on gold and silver regardless of whether it is worn or not.
How many karats qualify jewelry for zakat?
For zakat calculation purposes, all gold/silver items which are 12 karat and higher are treated as pure gold/silver. If the purity of your gold/silver is at least 12 karat, zakat will be discharged on the total weight of the jewelry; this will not be considered ‘overpaying.’ If the price of gold is -for example- $75/gram, and you have gold jewelry (12k or higher) weighing a total of 100 grams, you will discharge 2.5% of $7,500: $187.5.
If the gold and silver form less than half of the item: if they are removable – even by melting – then zakat is obligatory, but only on the amount of gold or silver. If they are not removable, then there is no obligation to pay zakat. There is no zakat on non-gold and non-silver jewelry whatsoever.
Do I give zakat for cryptocurrency?
One must give zakat on cryptocurrency just as he would for any other currency.
Do I give zakat on for my real estate business?
For investing in real estate: determine whether it is property for sale or if it will be rented out. If it is for sale you will pay zakat 2.5% of your share based upon the selling market price. After it is sold, you do not need to pay zakat on the money you earned until your next zakat year. If it is a rental property, you will only pay zakat 2.5% on the rental income, not the selling market price of the house.
Do I give zakat on stocks?
One will pay zakat upon the zakatable value of the stock. You may determine this by contacting the company and checking their balance sheets. For example, a stock may be valued at $100, but $80 of the stock equates to the value of the machinery and other non-zakatable assets. In this case, you will only have to pay zakat on the $20. In any case, if you choose to give zakat for the full $100, your zakat will be more than fulfilled.
Do I give zakat on my 401k?
One must pay zakat on 401k funds on a yearly basis.
One may choose to pay before or after withdrawal. If you choose to pay after withdrawal, you must make sure to pay for the previous years also. Taxes will be deducted when calculating zakat on one’s 401k portfolio. Not because one does not own the full amount, but because liabilities are deducted. Early withdrawal fees will not be accounted for; unless one withdraws early.
Do I give zakat on my pension fund?
Pension funds to which the employee did not contribute nor holds access to are not included in zakat calculations until actual withdrawal.
To whom can I give my zakat?
Generally, you will give zakat to someone who is “poor” – an individual is deemed eligible to receive zakat if they possess neither monetary assets nor items (excluding those essential for personal need) amounting to or exceeding the nisāb threshold. Essential personal use items include, but are not limited to, residence, vehicle, attire, cellular device, computer, appliances, furniture, and similar items. Items of entertainment, such as television sets and video games, are not considered essential items.
Potential “poor” people could include:
Can I give zakat to my family members?
It is preferred to give zakat to one’s “extended” family such as siblings, uncles, cousins etc, It is important to remember that zakat cannot be given to one’s direct ascendants and descendants: parents, grandparents and so on, children, and grandchildren and so on.
Can I give zakat to construct a masjid, school, hospital, or water well?
Zakat must be transferred to a human recipient. An organization or a physical structure cannot receive zakat.
Can I give my Zakat early?
One may discharge their zakat early. That being said, if the total amount they are obligated to pay happens to be higher by the time their zakat date comes around (they receive a higher than expected return or they receive an unexpected bonus for example), they will have to make up the difference. On the other hand, If the total amount turns out to be less and they ended up having paid more than what was due, the excess will count towards next year’s zakat.
Is there a limit to how much I can give to a single recipient?
It is disliked (makrūh) to distribute zakat in such a large amount that the recipients themselves would reach the nisāb threshold, and thus become liable to pay zakat. However, if an individual possesses the niṣāb amount, but has outstanding debts, their possession of this amount does not automatically qualify them as having wealth equivalent to the nisāb. In all cases, if zakat is given to an individual and upon taking possession, their total wealth is equal to or more than the nisāb, they can no longer accept zakat.
To what extent must I investigate a potential recipient?
When determining a zakat recipient’s eligibility, one may suffice with apparent markers of need. For example, if an individual has many dependents, a low-income job, and inexpensive commodities, they may be eligible for receiving zakat.
I gave zakat to someone thinking that they were poor, but I later learnt that they were not. Is my Zakat fulfilled?
If one gave zakat to an individual due to apparent signs of need but then later discovers that their recipient is not zakat-eligible, their obligation is nonetheless fulfilled. However, one must make sure that they give zakat after having knowledge of some markers of need: zakat will not be fulfilled if it is given haphazardly (unless the recipient is, in actuality, zakat-eligible).
Can I give zakat in non-monetary form? For example, can I give clothes in zakat?
Zakat may be given in either cash or kind. You will consider the average selling price of the item you wish to give. For example, if you must pay $100 dollars in zakat and the selling price of the clothing you wish to give in zakat is $100, this would be permissible and would fulfil your obligation.
Can a relative of mine such as parent or spouse fulfill the obligation of zakat on my behalf?
Your parent or spouse may fulfill the obligation of zakat on your behalf, but they are not obligated to. If they do choose to give your zakat on your behalf, make sure to verbally authorize them as your zakat agent.
When does ṣadaqat al-fiṭr become obligatory upon me?
Sadaqat al-fiṭr is obligatory upon anyone who possesses the niṣāb amount of wealth beyond their needs even if it consists of non-money property. For example, someone owns – beyond their needs – paintings and decorative items, for example, whose total value exceeds the niṣāb. Although such a person does not have to give zakat, they must give ṣadaqat al-fiṭr and sacrifice an animal on ʿĪd al-Aḍḥā, and cannot receive zakat.
When do I have to pay Ṣadaqat al-Fiṭr?
Ṣadaqat al-Fiṭr must be given before ʿĪd salah. Generally, it is better to have paid as early as possible so that the poor may use it for their ʿĪd preparations. If it is delayed the ʿĪd salah, it must still be given.
Do I have to give Ṣadaqat al-Fiṭr for my children? What about my spouse?
One is obligated to give ṣadaqat al-fiṭr on behalf of themselves and their minor children only. One may choose to give ṣadaqat al-fiṭr on behalf of their spouse and major children with their consent/authorization.
How much is Ṣadaqat al-Fiṭr?
Ṣadaqat al-fiṭr in the Chicagoland area this year is ~$7.
Zayd’s assets
Essential belongings:
Zakatable:
Non-Zakatable:
Deductibles:
In this case, Zayd will not pay zakat for:
Additionally, he will not pay zakat for his paintings and other decorative items because they are non-zakatable forms of assets ($10,000.) even though they are beyond the level of “needs.”
He will only give (zakatable) zakat for:
Finally, he deducts the expenses and debts ($100,000).
Thus, Zayd will give zakat the amount of 2.5% only on $275,000 ($6,875) for the year.