Zakat Essentials

One of the Quran’s major themes is social justice for those whom society disadvantages and compassion for the vulnerable. God says in the Quran:

As for the believing men and the believing women—all [of them] are allies of one another. They enjoin what is right and forbid what is wrong. Moreover, they [duly] establish the Prayer, and give zakat charity, and they obey God and His Messenger. It is these upon whom God shall have mercy. Indeed, God is overpowering, all-wise. (Al-Tawbah, 9:71)

Mention of zakat here is significant. It points to the characteristics of a fully functional (and fully human) community, promoting care and love between each other by guaranteeing justice unto the least of them, while shielding the weak from injury. This two-part functionality is then directly pinned to raising one’s spiritual consciousness through prayer (Salât) and raising one’s social consciousness by paying zakat. These special items—among all the commands of Allah and His Messenger—Allah has highlighted for scrupulous maintenance.

This is no utopian vision. On the contrary, it is a minimum acceptable moral standard for a working human community. Zakat plays a key role in bringing about such a model society. It not only enshrines the right of help for the community’s needy, facilitating ongoing support from the rich to the poor, but, in so doing, it builds a relationship of consideration and appreciation between society’s members.

Charity is the substance that binds every Muslim to every other by way of their obligation to one another in God. Islam builds its community out of human obligation toward each other, making each Muslim accountable for the well-being of every other Muslim. This concept of reciprocal social obligation is called takâful, meaning “mutual responsibility,” and it is strongly bolstered by the fact that paying zakat is an act of mandatory worship. The tenet of mutual responsibility helps Muslims envision their society like an extended family.

Throughout our history, whenever Muslims sincerely systematized the zakat obligation, as Allah (swt) and His Messenger, peace be upon him, ordained it, Muslims worked what are now considered social miracles. Societies flourished. Communities flowered. Individuals thrived.

Zakat awakens the individual’s social spirit with the truest practical expression of brotherhood. When Muslims pay zakat, the society behaves exactly like a family, the able helping the incapable, one upholding all. The Prophet said:

The believers—in their kindness, compassion, and empathy for one another—are as a single body. When one limb is afflicted, the whole body responds to it with sleeplessness and fever. (Bukhârî and Muslim)

Zakat spreads tranquility and peace in society because it secures the weak and their dependents with the guarantee of certain provision, shelter, and access to essential communal facilities. The mystery of zakat is not only that it links one to others by a sense of personal responsibility, but that it binds everyone to the individual through an obligation of sufficiency. There is no greater bulwark against social disintegration.

All possessions can be classified into either zakatable or non-zakatable wealth. For the purpose of zakat calculation, Muslim scholars have established five categories of zakatable wealth:

• Personal Zakatable Wealth: This includes money on hand and in bank accounts, stocks, and money held in retirement and pension accounts.
• Business Zakatable Wealth: This is further classified in two categories:
  • Trading goods and liquid assets including business inventory
  • Exploited assets such as rented properties and factories
• Agricultural Produce:
  • Crops from irrigated land, wherein the irrigation system entails costs and labor
  • Crops from non-irrigated land watered by rain or natural springs
• Livestock: Animals raised for commercial purposes— primarily sheep, goats, cattle and buffalo
• Treasure (rikâz): This includes buried valuables or natural resources, such as oil, precious metals, and gemstones. It can be classified more specifically as:
  • Hidden windfalls and discovered fortunes
  • Oil and mining

In general, zakat is calculated on personal net worth, excluding properties and items for personal, family, and commercial use. Public properties are also non-zakatable. Below is a partial list of wealth that is zakat-exempt:

Property for Personal, Family, and Commercial Use: This category contains seven primary kinds of wealth:

• Food: As stored for consumption by an individual or family
• Clothing: All personal and family apparel
• Residence: The domicile owned and occupied by the owner, including furnishings, utensils, and apparatus used for basic needs and necessity
• Transportation: The means of personal and family transport, such as vehicles used by an owner and family members
• Domestic Animals and Poultry: If used for household food and needs, one may own kinds and quantities in this category as follows (Note: the following numbers of animals for personal use and consumption are based on one zakat payer. If more than one zakat payer domicile together, or keep their animals and land collectively, the numbers would increase accordingly):
  • Bovine cattle: 1-29
  • Sheep or goats : 1-39
  • Poultry (chickens, turkeys, ducks): Unlimited (as long as for household needs only)
  • Pets including horses, dogs, cats and other household animals: Unlimited
• Tools: Devices, instruments and equipment used in one’s personal business
• Agricultural Land: The land itself, animals and equipment used in cultivation

Property in Public Trust: Properties used for mosques, schools, hospitals, orphanages and other public service; those designated as charitable endowments (waqf) for the benefit of the needy, and the funds generated from such properties are all non-zakatable (Fiqh az-Zakât, 338).

Unlawful Wealth: Only lawful assets are worthy of the blessing of zakat. Zakat cannot be calculated on prohibited or unlawful wealth, such as interest income, stolen property, or wealth acquired or earned through unlawful means, such as extortion, forgery, bribery, cheating or holding a monopoly. Such wealth must be returned in full to its lawful owners. If that is impossible, it is to be given away to the poor in its entirety (Fiqh az-Zakât, 72).

Zakat is paid to deserving individuals who come under one or more of eight zakatable categories designated by God in the Quran.

Indeed, [prescribed] charitable offerings are only [to be given] to the poor and the indigent, and to those who work on [administering] it, and to those whose hearts are to be reconciled, and to [free] those in bondage, and to the debt-ridden, and for the cause of God, and to the wayfarer. [This is] an obligation from God. And God is all-knowing, all-wise. – Al-Tawbah, 9:60

The Quran specifies how zakat is to be distributed precisely, but grants Muslims maximum flexibility in its collection. On one hand, this guarantees the right of the needful. On the other, it accommodates inevitable changes and variation in stores of wealth, effective distribution mechanisms, and diverse societies through time and in different places in the world. Trustworthy Muslim institutions collect and distribute zakat to the deserving they identify as belonging to one or more of the zakatable categories prescribed in the Quran.

It is noteworthy that Allah, Himself, identified for zakat payers and administrators the eight human categories of zakat disbursement—leaving this neither to ruler, nor to scholar, nor to the Prophet himself. It is reported that a man once came to the Prophet and asked him zakat. The Prophet said:

Allah permitted not even a prophet to adjudge zakat-[worthiness]. Rather, He Himself ruled on it and permitted it in eight cases. Therefore, if you belong to any of these, I shall most surely give you your right. – Abû Dâ’ûd

The eight categories of eligible zakat recipients are as follows:

• The poor (al-fuqarâ’), meaning low-income or indigent
• The needy (al-masâkîn), meaning someone who is in difficulty
• Zakat administrators
• Those whose hearts are to be reconciled, meaning new Muslims and the larger community
• Those in bondage (slaves and captives)
• The debt-ridden
• In the cause of God
• The wayfarer, meaning those who are stranded or traveling with few resources

As a general rule, charities are a sacred trust (amânah) to be spent according to the giver’s wishes, provided they are in accordance with the injunctions of the Quran and the specifications of the Prophet.

Islam enjoins administrators of charity—including zakat— to honor the legitimate purposes intended by its payers for the charity they have vouchsafed them. Whether an individual, organization, or government agency, Islam considers the appointed executor of zakat and sadaqa charity a temporary trustee (wakîl) over all such funds. The funds are deemed “restricted” or “designated,” and the trustee is constrained by Divine Law (Sharî‘ah) to disburse as intended by its giver.

The trustee is no more than a conduit between payer and recipient, empowered only to act as intermediary. The trustee’s agency powers expand only if the payer of zakat or sadaqa imparts his or her payment to the trustee with no further designation than identifying it as either zakat or sadaqa. In this case, the trustee can disburse such unrestricted zakat or sadaqa as is deemed best in accordance with the limitations set by the Quran and defined by the Prophet.

If a charitable organization accepting zakat cannot execute a zakat payer’s request (or that of any charitable donor) it must either contact the payer and receive approval for another legitimate zakat use, turn the zakat payment over to another charity that can execute the payer’s request (with the payer’s consent), or return the payment to the payer, notifying him or her of its limitations.

As a general rule, Zakat must be disbursed in the area where it is collected. The poor and needy of a locality where zakat is collected have priority over all others as recipients. (Fiqh az-Zakat, 515; for exceptions to this, see next question).
Local distribution of zakat from a community’s wealthy to its poor is the Sunnah of the Prophet and, consequently, paramount.

The Prophet œ established this precedent with Mu’âdh ibn Jabal in Yemen in unmistakable language. Mu’âdh himself divided Yemen into local regions and had zakat collected and distributed from the wealthy of those internal localities to the poor of the same place of collection. Many other verified accounts from the Companions confirm this practice.

Indeed, the principle of local collection and distribution has been the established practice implemented by every succeeding Muslim generation, and endorsed by all the scholars. To take zakat out of a locality and give it in another place without extenuating circumstances when need still remains in the original locality is a serious violation of zakat. Nor can this obstacle be easily overcome.

In a well-known case, ‘Umar ibn Al-Khattâb was queried about the zakat of the Bedouins, a nomadic people. He replied, “By Allah! I shall render sadaqa (here, meaning zakat) to them until each one of them becomes the owner of 100 camels, male or female” (Al-Musannaf, 3:205). That is to say, each one of them would become wealthy before removing the zakat of the Bedouins, who were generally very poor, from their locality.

This prevention is particularly strong when it comes to in-kind zakat such as livestock or crops. Scholars differ on where to pay zakat if one’s zakat is monetary and earned in one place, while its payer lives in another. Most scholars consider it payable in the place where the payer resides, rather than where it was earned (Fiqh az-Zakat, 511).

No. When local need is sufficed and zakat funds remain in the repository, it is permissible to move that surplus from a locality to a central zakat bayt al-mal (zakat treasury) for disbursement. No such entity exists in North America yet.

In addition, legitimate authorities in Muslim polities can transport zakat as they see fit for the greater good of all. Barring this action, Shaykh Yusuf Qardawi argues, the Muslim individual inherits that authority in the case of his or her own zakat payment: “Individual payers can…decide whether to transport due zakat to needy relatives, to people who are in dire need, for essential public interests of Muslims, or to a pivotal Islamic project in another country.” (Fiqh az-Zakat, 517). He states, as well, that the zakat agency must not transport all the collected zakat unless there is no local need at all for zakat funds (Fiqh az-Zakat, 517).

Other stipulations permit removal of some zakat funds outside the community. If Muslims of one community are affluent and without essential need, or if there is an overwhelmingly urgent need elsewhere such as extreme poverty, life-threatening displacement or catastrophic natural disasters, then a portion of zakat from one community must be moved to another, even if distant. Muslims are brothers one to another, and they are like one body. We cannot look away from Muslims anywhere in need—even if this should mean that we sacrifice some of our own need for the sake of solidarity, and to relieve the suffering of other Muslims.

Evidence indicates that the Prophet endorsed these exceptions. Imam Mâlik said: “It is not permitted to move zakat [from one locality to another] unless its need is more urgent in another locality” (Al-Amwâl, 595). The practice seems clear that a locality’s poor and needy should be sufficed, and, in the case of dire need, a portion of zakat can and should be transported to help the desperate (Fiqh az-Zakat, 515-17).

Resource: The Idea of Philanthropy in Muslim Contexts by Jon B. Alterman and Shireen Hunter (The Center for Strategic and International Studies; February 22, 2004).

Zakat is obligatory, not optional; it is worship, not a tax. No matter the country one lives in, and whether one’s taxes increase or decrease, there is no substitute for paying zakat. Zakat is a permanent and continuous Pillar of Islam. No tax can ever replace it. No circumstance can ever preclude its payment whenever it comes due. God, Himself, has made the giving of zakat to the needy and entitled a sign of loyalty to Him.

Governments may forgive unpaid taxes, but none can absolve one of due zakat payments—no matter how far back they accumulate—for zakat is other people’s money.

Muslim scholars, such as the 11th century Andalusian polymath Ibn Hazm, have said that one who has failed to pay zakat shall have one’s due zakat calculated at its set percentage rate and then multiplied by the years it was not paid—even if this consumes all of one’s wealth. Other scholars hold that nonpayment of zakat forfeits one’s right to transact business. Moreover, if a transaction stipulates that a portion of profits shall inure to the benefit of a zakat fund, nonpayment of that fund nullifies the contract.

Zakat is a solemn obligation. The moment it falls due upon one’s wealth, that portion no longer belongs to the wealth-holder. The poor and eligible automatically become its rightful owners. Let no believing man or woman feel content with the wealth God has granted them until they have duly distributed the zakat due on it to the poor and needy, who are its lawful trustees in the sight of God.

Zakat is the first known system of community-wide welfare regulated as a social support network for those in need. It is a meaningful institution with a clearly defined religious-social-economic mandate. Its rules, regulations, structures, standards, and specific functions are well-established. It does not depend on voluntary charity, and its collection is enforceable by society.

The zakat system revealed by God and instituted by the Prophet was complete and functional among Muslims in the Seventh Century. Within a few years of the Prophet’s migration to Madinah, the zakat system had become so effective that very few people even needed it. For one of the virtues of zakat is that in providing for the poor and linking each to all and all to each, it enables people to separate themselves from those social practices that guarantee the poverty of some.

It took more than 13 centuries after the Prophet for Europe (and by that time America) to even address poverty systematically with measurable effectiveness. Not until 1941 did England and the United States initiate a worldwide agreement for governments to respect and warrant the social welfare of their nationals. Yet even then beliefs embedded in capitalist and communistic economic theory made certain that global income inequalities would increase to the extent that they would threaten civilization and the environment, as we see today.

Resources are not only gifts from God to all human beings but also a trust. Accordingly, Islam emphasizes an equitable distribution of income and wealth for the fulfillment of the needs of everyone. As a consequence of the application of one’s skills and efforts, one’s birth, location, and timing, and other factors extreme inequalities emerge between people. In the absence of adequate social restraints and mechanisms for re-distribution, wealth invariably concentrates in the hands of a few. To counter this, in part, God has enjoined the believing society with strict laws of inheritance and public disbursement of windfalls, establishing the institution of zakat to redress extreme or highly skewed inequalities of income and wealth. As God states it in the Quran:

So that [wealth] does not merely circulate between the wealthy among you. (Al-Hashr, 59:7)

In every society, there are those who may find it hard to earn a living through their own labor, whether owing to disability, lack of opportunity, or depressed production or wages. Islam addresses this by making helping the needy an individual and collective responsibility, first within Muslim families and society, and then through the global Muslim community at large. Moreover, it forbids, in the strongest and broadest terms, stigmatizing the destitute or blaming them for their condition (Qurayshî, Annual Zakât Computation Guide, 9-13).

If a Muslim society does not apply the comprehensive economic injunctions of the Quran and the Prophet, the zakat charity alone will not be enough to recreate poverty-free societies, as we have just described. We have plenty of examples of this insufficiency in the Muslim societies of our times.

Yet were Muslims to prudently apply the principles of zakat in a current Muslim country, it would not, in isolation of all other factors, cure poverty. Zakat is part of a godly economic outlook on, and practice in, the world. For example, Islam forbids extravagance, whether or not one is rich or poor. Thus owning utensils made of gold and silver, or residing in ostentatious homes, is considered excessive, even forbidden.

In addition, Islam also forbids earning interest. Rather, it inspires human beings to work for their money, not to live off the incurable debt and financial misery of others. Moreover, Islam calls upon the rich to employ the poor. The amazing historical successes of zakat demonstrate the great efficacy of the divinely-ordained system at work within the context of Islam’s other economic injunctions.

Among people who have internalized Islam’s concepts of selflessness, self-restraint, conservation, sufficiency, contentment, modesty, extended family and familial responsibility and love of the poor; and amid societies whose members are committed to upholding the divine covenant of all Muslims to secure the individual believer’s unfettered right of total worship, zakat charity has unambiguously demonstrated its transformative power.