Zakat

“And establish prayer and give Zakat, and whatever good you put forward for yourselves – you will find it with Allah.”

[2:110]

The Poverty Relief Team follows a 100% donation policy for Zakat.  Our policies and processes ensure that the Zakat collected is allocated and implemented correctly in accordance with Shariah Law. Wherever possible, the Poverty Relief Team provides Zakat in cash. However, in war-torn countries and rural places around the world, where the money has no value or people have limited access to acquire help and other necessities, the currency has minimal worth.

In the interest of the recipient, the charity assesses the people's requirements and provides them with what they need, such as food, shelter, emergency relief, and clothing, with their agreement (Wakalah).

What is Zakat?

Zakat is a compulsory act of worship that requires Muslims, at or above a certain wealth threshold, to donate a portion of that wealth, typically 2.5%, to those who are eligible. This threshold is called the Nisab (sometimes also spelled niṣāb).

Who has to pay Zakat?

1. Muslim Adults: Zakat is obligatory for all adult Muslims who meet the wealth threshold, known as Nisab. Adults, in this context, refer to individuals who have reached the age of puberty and are mentally sound.

2. Wealth Threshold (Nisab): To be liable for Zakat, a person must possess wealth (including cash, gold, silver, and certain other assets) above a certain minimum threshold known as Nisab. The Nisab value is determined based on the current market value of silver or gold.

3. Ownership of Wealth for a Full Lunar Year: Zakat is due on wealth that has been in a person's possession for a full lunar year. This ensures that individuals are giving Zakat on stable, accumulated wealth.

4. Eligible Assets: Zakat is typically calculated on various types of wealth, including cash, savings, gold, silver, and certain types of investments. However, personal items like a primary residence, clothing, and other necessities are generally not included in the calculation.

5. Excluded Individuals: Certain categories of individuals are exempt from paying Zakat. This includes those who do not meet the Nisab threshold, children, and individuals who do not possess wealth for a full lunar year.

6. Willingness to Contribute: In addition to meeting the financial criteria, the individual must have the intention and willingness to fulfill this religious obligation.

It's important to calculate Zakat accurately and distribute it to eligible recipients, such as the poor, needy, and those facing financial hardships. Zakat is a means of purifying one's wealth and fostering a sense of social responsibility within the Muslim community. Individuals often work with religious scholars or local authorities to ensure they fulfill their Zakat obligation correctly.

What is the Nisab value?

The Nisab was set by Prophet Muhammad (SAW) at a rate equivalent to: 87.48 grams of gold and 612.36 grams of silver.

As we no longer use silver or gold as currency, you need to find out the equivalent monetary exchange value of the rates the Prophet Muhammad (SAW) set in your local currency. You can do this by checking the market rate of gold and silver.

The two values used to calculate the Nisab threshold are gold and silver.

Current Nisab Value (26 February 2024)

What assests do I pay Zakat on?

Zakat is typically calculated on various types of wealth that a Muslim possesses. The key assets on which Zakat is applicable include:

1. Cash and Savings: Any money that you have in cash, bank accounts, or savings must be considered for Zakat calculations.

2. Gold and Silver: Zakat is applicable on gold and silver jewelry, coins, or any other forms of these precious metals that you own.

3. Investments: Zakat is calculated on the value of investments, such as stocks, bonds, mutual funds, and any other tradable assets.

4. Business Assets: If you own a business, Zakat is payable on the business assets, merchandise, and profits.

5. Livestock: For those engaged in agriculture or farming, Zakat may be applicable to certain types of livestock.

Who is eligable for Zakat?

If someone is eligible for Zakat, their eligibility is determined by eight considerations. Consequently, eight types of people were created from the Zakat receivers. According to what Allah (SWT) says in the Qur'an, these consist of:

“Indeed, the prescribed charitable offerings are only to be given to the 1. The poor 2. The needy 3. To those who work on administering it 4. Those who have a reconciliation of heart (those who have embraced Islam or are inclined to it) 5. To free those in bondage 6. To the debt-ridden 7. For the cause of God 8. To the wayfarer This is an obligation from God. And God is all-knowing, all-wise.”

[Quran 9:60]

Ramadan 2024 Zakat distribution.

Fulfill your obligation and donate your Zakat now.

“And ˹continue to˺ perform ˹regular˺ prayers, pay alms-tax, and lend to Allah a good loan. Whatever good you send forth for yourselves, you will find it with Allah far better and more rewarding”

[72:20]