Zakah is an Arabic word which in the general sense means both growth and purification. In the Islamic sense, it means obligatory alms-giving to the less fortunate which is the third of the five pillars of Islam.
It is obligatory for Muslims to pay 2.5% of their wealth which is in excess of their needs and which they have held for over one year. Immediate family has the right to receive Zakah first if they are in need : then the extended family, neighbors and community can be the recipients depending on needs. The right way of Zakah entails not making a show of it and doing it without publicity the intention being to please Allah and not to be recognized as a giver of Zakah.
Zakah is calculated based on the worth of land, gold, silver, properties, animals, jewelry and cash. The amount of money or goods a person can possess without paying Zakah is called ‘nisaab’(a kind of threshold amount). For example, the ‘nisaab’ for gold is 85 grams and for silver is 595 grams. Only people who possess more than this amount of gold or silver need to pay Zakah on these.
Zakah is an equitable means of wealth-distribution from the wealthy to the poor, and it is mandated by Islam in several places in the Quran. For example:
Zakah expenditures are only for the poor and for the needy and for those employed for it [by the state to collect, guard and distribute the Zakah] and for bringing hearts together [for Islam] and for freeing captives [or slaves] and for those in debt and for the cause of Allah and for the stranded traveler- an obligation [ imposed] by Allah. And Allah is Knowing and Wise. ( Chapter 9 Verse 60).
It is evident that the collection and distribution of Zakah allows a society to provide a welfare system for the poor and needy. It allows the rich to donate part of their wealth and ‘purify’ it; as resources can be organized into a collective pool, it is not necessary for the poor, needy, enslaved, or those burdened by debt, to personally approach the wealthy for alleviating their situation. In fact, prophet Mohammed (peace be upon him) instructed his followers frequently to give Zakah, and reported, “Allah said, ‘O son of Adam! Spend, and I shall spend on you’”. This means that if we want Allah to have mercy on us and expect to be protected from his wrath on the day of judgment, we must spend in a way that pleases Him. From a social and global perspective, the giving of Zakah may be the much-needed solution to the widespread problem of hunger, disease, poverty and starvation. Millions of people die of hunger and disease every year, whereas there are those who are extremely rich, living opulent and luxurious lives.
However, for those who sincerely want to give their Zakah and do their religious and social duty, there are issues that are raised frequently, such as:
- What day of the year should Zakah be calculated as wealth and the value of possessions changes, sometimes daily (i.e. price of gold and silver)?
- How much Zakah is due on agricultural products and is it due based on their actual price or price projected on harvest? The ‘nisaab’ on produce is usually 651.4 kilograms, over which Zakah becomes due, at the rate of 1/10 of crop naturally watered by rain or rivers and 1/20 of crop watered by animals or other means.
- What amount of Zakah is payable for investment property which is rented out? Some scholars say it is payable on the rent and some maintain it is due on the profit when the property is sold.
- Some people have asked if Zakah is paid annuaaly at the rate of 2.5% then in 40 years (i.e. 2.5 X 40= 100), will their wealth become nil. Such a scenario is not possible because a) Zakah is not payable when wealth reaches the ‘nisaab’ level and b) it is being assumed that there will be no increase in wealth over time.
Contrary to popular belief, Zakah can be paid to Muslims and non-Muslims, family members and others, and one person can choose to help several different people of charities depending on their need. It is therefore mandatory to use Zakah to improve the social and economic situation of one’s extended family and local community, and to contribute to solving regional and global poverty.