Zakat is an Arabic term that means
purification. When we have money in savings that lasts
with us for more than a year, we take 2.5% of that savings
and give it away to the poor and needy and those
categories outlined in the Quran.
Who can I pay my Zakat to?
Zakat is to be given to eight
categories of people mentioned in Surah Taubah 9:60:
1. The needy,
2. The poor,
3. Those collecting and distributing Zakat,
4. Those whose hearts need softening,
5. Those in prison,
6. Debt relief,
7. in God’s path,,
8. and helping the travelling who are stranded.
What is Nisab?
Nisab is an Arabic word that
essentially means a portion.
It is the amount of money you must have in order to be
obligated to pay Zakat. If you don’t have that amount of
money in savings, then you don’t have to give charity this
Nisab is either 85 grams of gold, 595 grams of silver, or
their equivalent values in cash. In modern times, it is
prescribed to use the silver Nisab when calculating Zakat.
Why do we use silver Nisab?
The Nisab prescribed during the time
of the Prophet, peace and blessings be upon him, was
either 85 grams of gold (known as dinar at the time) or
595 grams of silver (known as dirham at the time).
The dinar and dirham were interchangeably used in the
markets in the Prophetic era. The exchange rate was 1:10
at the time and therefore the Zakat payer ended up paying
the same amount whether they chose silver or gold Nisab.
There is, however, a stark difference between silver and
gold Nisab today and therefore the majority of scholars
suggest the use of silver Nisab.
Who pays Zakat?
Zakat is due from any Muslim, young
or old, male or female, on the money that is held in
savings for one calendar year or more.
What do I pay Zakat on?
The following are considered
• Gold & silver
• Money in any currency
• Fixed assets for investment
• Tradeable assets owned by your business
• Crops and herded animals
Do I have to pay Zakat on gold and
Yes, Zakat is paid on gold and silver
This is regardless of whether you wear it or keep in the
safe as an investment. If it is more than the nisab, Zakat
is paid on any gold or silver you have.
Do I have to pay Zakat on my
Depending on where you live, your
retirement fund may have a different name (401K, Roth IRA,
RRSP, etc). Zakat is not paid on your retirement fund or
any account to which you do not have access, until you
cash out without penalty. At that time, you would pay
Zakat for one year.
Can I pay Zakat to my spouse or
As a general rule, you may not give
Zakat to anyone you are obligated to support financially.
For a man, this includes his wife, his children, and his
parents. Therefore, a man can not pay Zakat to his wife,
since he is obligated to provide for her.
A woman, however, is not obligated to financially maintain
her husband. She may give Zakat to her husband only if he
is in need and falls under one of the above eight
For both men and women, your Zakat can be given to your
siblings, cousins, uncles, and aunts.
Can I pay next year’s Zakat in
If you know that your earnings and
savings will be the same next year, you may pay your Zakat
in advance for that year, along with your Zakat for this
However, if your earnings and savings change such that you
owe more, you will need to pay the difference.
What is Zakat al-fitr?
Zakat al-Fitr is paid as an expiation
for the sins and mistakes we commit during Ramadan. It is
paid as 2.5kg (or 5lbs) of wheat, dates, rice, etc. You
may pay the cash value of rice if you like.
Still have questions?
Ask a Zakat expert
Shaykh Aarij Anwer is the Zakat Program Manager at LaunchGood.