Zakah in Islam (Charity Alms) - A Beginner's Guide

Noushad Muneer
Preface
This is a beginner’s guide for getting a comprehensive understanding with respect to zakat. Zakat, the third pillar of Islam consists of certain things you need to learn in order to execute it properly. This includes things such as; definition of zakat, zakat rules, types of zakat, the Hikmah behind the zakat pillar, the functions zakat plays on individuals as well as society and the benefits of zakat. This guide shall help you learn the primary Qur'anic verses and Hadith on Zakat. You may often doubt if there is any difference between zakat and sadaqah or if they are all the same, then this guide shall help you to find the answer. This guide also deals with the questions regarding the categories of people who can accept zakat, the formula of zakat and how to pay zakat online.
Content
Chapter 01
The Definition of Zakat
Chapter 02
Benefits of Zakat and the Hikmah behind
Chapter 03
The Difference between Sadaqah and Zakat
Chapter 04
Qur'anic verses and Hadith on Zakat
Chapter 05
The Types of Zakat
Chapter 06
 The Categories of People Who Can Accept Zakat
Chapter 07
 How to Calculate Zakat
Chapter 08
How to Pay Zakat online
Chapter 01

The Definition of Zakat

Linguistically the word ‘zakat’ in Arabic comes from ‘zakaa’, which means, to increase or grow. The word is also used to refer to purity in some cases. This can be found in the holy verse of Qur’an, as Allah says: (قَدْ أَفْلَحَ مَن زَكَّاهَا): which can be translated “He who is pure has succeeded.”
Beyond this lexical definition, you need to understand what is zakat in detail. Simply, Zakat is a charity Allah has made obligatory on every rich Muslim man or woman. Zakat is the third pillar of Islam. This means to spend a particular part of their money or property to distribute it between the poor, vulnerable, and deserving as their divinely established right. The Prophet Muhammad sallallahu ‘alaihi wasallam, , established Zakat as the third of the five pillars that Islam is built on.
In order to know how the major form of charity in Islam, the zakat, works, it is very necessary that you shall know the zakat rules. Therefore, here you will learn about the conditions for the zakat to be obligatory.
Zakat in Islam will not become an obligation unless the following conditions are met:
  1. You must be a Muslim.
  2. You must be an independent person. A slave is not obliged to give any kind of zakat in Islam.
  3. You must be a grown up person. A child need not have to pay zakat even if he is wealthy.
  4. You must be a sensible person. A mad person does not owe to pay zakat.
  5. You should have the full ownership of the money or the property.
  6. You must own an amount of money or property that reaches the nisab[1]
  7. To have excess money after your necessities. You need not have to pay zakat for the house where you reside, the clothes you wear, the furniture or other household you use at home, the vehicles you ride on, and the tools or weapons you use for personal needs. Likewise, zakat is not required for books if it is not for trade as all such things are considered as the basic needs.
8.    The wealthy should be free of debt. Whoever owes a debt that exceeds or decreases the nisab, zakat is not obligatory on him.
9.    The wealth must be growing in nature, whether it is actually growing, like cattle, or it is indirectly growing, like gold and silver. There is no Zakat on gems such as pearls, rubies if these gems are not for trade, because they are not growing in nature, neither directly nor indirectly.

When to pay Zakat

It is very important for you to know when it is obligatory for you to pay the zakat. For Zakat to be obligatory, it is required that the nisab must pass a year as per the lunar calendar.
This means that the amount must reach nisab during both ends of the year, whether it is so throughout the year or not. If you possess the nisab at the beginning of the year and it remains so until the end of the year, then zakat is due on it. If the amount reaches nisab at the beginning of the year and then it decreases during the year and later, it is fulfilled at the end of the year, then also zakat is due on it. If you own the nisab at the beginning of the year, then earns some more wealth from the same category during that year, it must be included in the original money, and zakat is due in the total, whether that money is benefited from a trade, a gift, an inheritance, or in any other way.
Zakat is not valid unless you make the intention to pay zakat when you pay your money to the poor or the agent, who distributes it among those who are eligible for the zakat. You can also make the intention for zakat while you separate your zakat from the total money. It is not necessary for the payment of zakat to be valid for the poor person to know that the money he took is zakat.
Chapter 02

Benefits of Zakat and the Hikmah behind

You have already learned the definition of zakat. Here you will learn what does zakat means in a deeper sense. The holy Shari’ah has certain Hikmah behind the zakat. The very primary thing is to prepare the human being almighty to obey the rules of his Sustainer. Zakat is helpful in bringing good to the individual and society by purifying the souls of people from avarice and greed. It can accustom you to the habit of spending money in the cause of Allah. It is an opportunity to purify your wealth and obtain the blessings of Allah in it.
The zakat helps to create solidarity and cooperation between members of society by offering helping hands to the people and relieving them, and thus freeing society from hatred and envy. The Muslim society is like a single body;
The Prophet ﷺ described it by saying:
The believers in their mutual kindness, compassion and sympathy are just like one body. When one of the limbs suffers, the whole body responds to it with wakefulness and fever. Allah almighty says: And my mercy encompasses everything, so I will write it down for those who are pious and give zakat, and those who care for them - are thankful to God for their kindness.
Zakat does not let the money concentrate within a few hands, instead, it is the keenness to distribute it to all members of society in a way that gives them peace and happiness. On the other hand, zakat helps to reduce financial crimes such as theft, looting, burglary, and the like. Because the poor people shall be aware of aids and assistance provided by the richer class of people and this leads to a brotherhood and cooperation between the rich and poor people.
There are many other benefits for zakat as the individual and society is concerned. It includes eliminating unemployment by investing the money that is distributed among the needy, which qualifies him to seek sustenance in several forms of trade, industry, or anything else. It creates job opportunities for the collectors and distributors of Zakat funds, who are known as Zakat workers, as their wages are paid from Zakat funds.
It finds you a way to learn about the laws of Allah. Because you cannot pay your zakat until you are very well aware about its rulings, money, shares, beneficiaries, and other things required. Paying zakat on money means to do something that develops your money according to the teaching of the holy Prophet, Peace and Blessings be upon him. This means, if a person gives charity from his money, that protects him from pests, and perhaps God will open for him an increase in sustenance because of this charity. 
The hadith says:
“Charity does not decrease money” (Narrated by Muslim).
There shall be multitudes of Hikmah behind each command of Allah almighty. If you think more about this and research more you can find many more things. The more we learn about the hikmah and benefits of the holy obligations the more it will help to increase our imaan in Allah almighty and his Prophet. Later in the chapter that follows mentioning the Qur’anic verses and hadith about zakat also you can learn many more things in this regard.
Chapter 03

The Difference between Sadaqah and Zakat

What is the difference between Zakat and Sadaqah? There are many differences between zakat and sadaqah, and they are as follows:
The difference between zakat and sadaqah in terms of its rulings as zakat is obligatory, and on specific things; such as gold and silver, cattle, crops, goods for trade, and credit amounts. The compulsory zakat also has certain conditions, like reaching the nisab, and it has a specified amount.
At the same time, sadaqah is supererogatory and not obligatory, and it is permissible in anything that a person is generous with regardless of a specific type. It is not stipulated by any conditions. It is permissible for a person to give sadaqah at any time, and without a quantity. There are differences between zakat and sadaqah in terms of the categories eligible for zakat, since it is given to some specific categories by Sharia, and it is not permissible to give it to others, like father or son.
Zakat must not be given to the rich or powerful who are able to earn. As for charity, it can be given to any person without specifying its types. It is not permissible to take out any money for sadaqah from a person’s wealth after his death. At the same time, it is obligatory on the family members of the dead person to take out the zakat fund from his assets and distribute it among the eligible. Zakat shall be distributed within the region of the person in most cases and it is the best, and it is not permissible to give it to a non-Muslim.
The difference between zakat and sadaqah in terms of reward and punishment is that one who abandons zakat and the one who withholds it will be punished on the day of judgment. On the other hand, as for charity, the one who does not do it is not tormented and those who do zakat as well sadaqah are promised with big rewards from Allah almighty. The difference between zakat and sadaqah in terms of the persons to whom zakat may be given, for example, it is permissible to build mosques and hospitals, and print books using sadaqah.
Every zakat is called sadaqah in a deeper sense, and not every charity is called zakat. This is because, everything that a person gives out of his money is charity, whether it is obligatory or not and zakat is restricted to a specific amount.
Chapter 4

Qur'anic verses and Hadith on Zakat

There are numerous Qur’anic verses and authentic hadith regarding zakat. Here you will learn some most relevant ones among that along with the meaning.
The Qur’an says;
"وَأَقِيمُوا۟ ٱلصَّلَوٰةَ وَءَاتُوا۟ ٱلزَّكَوٰةَ وَٱرْكَعُوا۟ مَعَ ٱلرَّٰكِعِينَ"
Establish worship, pay the poor-due, and bow your heads with those who bow (in worship). [Qur’an 2:43]
"وَمَا تُنفِقُوا۟ مِنْ خَيْرٍ فَلِأَنفُسِكُمْ ۚ وَمَا تُنفِقُونَ إِلَّا ٱبْتِغَآءَ وَجْهِ ٱللَّهِ ۚ وَمَا تُنفِقُوا۟ مِنْ خَيْرٍ يُوَفَّ إِلَيْكُمْ وَأَنتُمْ لَا تُظْلَمُونَ"
And whatever good you [believers] spend is for yourselves, and you do not spend except seeking the countenance of Allah. And whatever you spend of good - it will be fully repaid to you, and you will not be wronged. [Qur’an 2: 272]
"يا أَيُّهَا الَّذِينَ آمَنُوا إِنَّ كَثِيرًا مِنَ الْأَحْبَارِ وَالرُّهْبَانِ لَيَأْكُلُونَ أَمْوَالَ النَّاسِ بِالْبَاطِلِ وَيَصُدُّونَ عَنْ سَبِيلِ اللَّهِ وَالَّذِينَ يَكْنِزُونَ الذَّهَبَ وَالْفِضَّةَ وَلَا يُنْفِقُونَهَا فِي سَبِيلِ اللَّهِ فَبَشِّرْهُمْ بِعَذَابٍ أَلِيمٍ"
"يَوْمَ يُحْمَى عَلَيْهَا فِي نَارِ جَهَنَّمَ فَتُكْوَى بِهَا جِبَاهُهُمْ وَجُنُوبُهُمْ وَظُهُورُهُمْ هَذَا مَا كَنَزْتُمْ لِأَنْفُسِكُمْ فَذُوقُوا مَا كُنْتُمْ تَكْنِزُونَ"
O you who believe! most surely many of the doctors of law and the monks eat away the property of men falsely, and turn (them) from Allah's way; and (as for) those who hoard up gold and silver and do not spend it in Allah's way, announce to them a painful chastisement.
On the day when it shall be heated in the fire of hell, then their foreheads and their sides and their backs shall be branded with it; this is what you hoarded up for yourselves, therefore taste what you hoarded. [Qur’an 9:34,35]
The Hadith says;
عَنْ أَبِي هُرَيْرَةَ ـ رضى الله عنه ـ قَالَ قَالَ رَسُولُ اللَّهِ صلى الله عليه وسلم ‏"‏ مَنْ آتَاهُ اللَّهُ مَالاً، فَلَمْ يُؤَدِّ زَكَاتَهُ مُثِّلَ لَهُ يَوْمَ الْقِيَامَةِ شُجَاعًا أَقْرَعَ، لَهُ زَبِيبَتَانِ، يُطَوَّقُهُ يَوْمَ الْقِيَامَةِ، ثُمَّ يَأْخُذُ بِلِهْزِمَتَيْهِ ـ يَعْنِي شِدْقَيْهِ ـ ثُمَّ يَقُولُ أَنَا مَالُكَ، أَنَا كَنْزُكَ ‏"‏ ثُمَّ تَلاَ ‏{‏لاَ يَحْسِبَنَّ الَّذِينَ يَبْخَلُونَ‏}‏ الآيَةَ‏.‏
Narrated by Abu Huraira رَضِيَ اللّهُ عَنْهُ:
Allah's Messenger (ﷺ) said, "Whoever is made wealthy by Allah and does not pay the Zakat of his wealth, then on the Day of Resurrection his wealth will be made like a baldheaded poisonous male snake with two black spots over the eyes. The snake will encircle his neck and bite his cheeks and say, 'I am your wealth, I am your treasure.' “Then the Prophet (ﷺ) recited the holy verses: 'Let not those who withhold...' (to the end of the verse). (3.180). [Sahih Al Bukhari]
عَنْ أَبِي ذَرٍّ ـ رضى الله عنه ـ قَالَ انْتَهَيْتُ إِلَى النَّبِيِّ صلى الله عليه وسلم قَالَ: ‏ "وَالَّذِي نَفْسِي بِيَدِهِ ـ أَوْ وَالَّذِي لاَ إِلَهَ غَيْرُهُ، أَوْ كَمَا حَلَفَ ـ مَا مِنْ رَجُلٍ تَكُونُ لَهُ إِبِلٌ أَوْ بَقَرٌ أَوْ غَنَمٌ لاَ يُؤَدِّي حَقَّهَا إِلاَّ أُتِيَ بِهَا يَوْمَ الْقِيَامَةِ أَعْظَمَ مَا تَكُونُ وَأَسْمَنَهُ، تَطَؤُهُ بِأَخْفَافِهَا، وَتَنْطَحُهُ بِقُرُونِهَا، كُلَّمَا جَازَتْ أُخْرَاهَا رُدَّتْ عَلَيْهِ أُولاَهَا، حَتَّى يُقْضَى بَيْنَ النَّاسِ" ‏
Narrated by Abu Dhar رَضِيَ اللّهُ عَنْهُ:
Once I went to him (the Prophet (ﷺ) ) and he said, "By Allah in Whose Hands my life is (or probably said, 'By Allah, except Whom none has the right to be worshipped) whoever had camels or cows or sheep and did not pay their Zakat, those animals will be brought on the Day of Resurrection far bigger and fatter than before and they will tread him under their hooves, and will butt him with their horns, and (those animals will come in circle): When the last does its turn, the first will start again, and this punishment will go on till Allah has finished the judgments amongst the people." [Sahih Al Bukhari]
عَنْ خُرَيْمِ بْنِ فَاتِكٍ، قَالَ قَالَ رَسُولُ اللَّهِ صلى الله عليه وسلم ‏ "‏ مَنْ أَنْفَقَ نَفَقَةً فِي سَبِيلِ اللَّهِ كُتِبَتْ لَهُ بِسَبْعِمِائَةِ ضِعْفٍ ‏"‏ ‏.‏
It was narrated that Khuraim bin Fatik said: "The Messenger of Allah (ﷺ) said: 'Whoever spends in the cause of Allah, it will be recorded for him seven hundred fold.' [Sunan An Nasai’]
Chapter 5

The Types of Zakat

There are mainly two types of zakat;
1) Zakat al fitr which is also known as Zakat al badn
2) Zakat for wealth

Zakat al Fitr

Zakat al fitr is a duty, which is obligatory on every Muslim, whether male or female, minor or adult as long as they have the means to do so.
According to a an authentic Hadith; Ibn 'Umar said that the Prophet has made Zakat al-Fitr compulsory on every slave, freeman, male, female, young and old among the Muslims; one Saa` of dried dates or one Saa` of barley. [Saheeh Bukhari]
The head of the household may pay the required amount for the other members.
The significant role played by zakat in the circulation of wealth within the Muslim society is also played by the Zakat al-Fitr. However, in the case of zakat al fitr, each individual is required to calculate how much charity is due from themselves and their dependents and go into the community in order to find those who deserve such charity. Thus, Zakat al-Fitr plays a very important role in the development of the bonds of community.
The main purpose of Zakat al-Fitr is to provide the poor which they can celebrate the festival of breaking the fast (Eid al Fithr) along with the rest of the Muslims.
Every Muslim is required to pay Zakat al-Fitr at the conclusion of the month of Ramadan as a token of thankfulness to God for having enabled him or her to observe the obligatory fast. Its purpose can be explained as following:
1. As a levy on the fasting person. This is based on the hadith: The Prophet of Allah said, "The fasting of the month of fasting will be hanging between earth and heavens and it will not be raised up to the Divine Presence without paying the Zakat al-Fitr."
2. To purify those who fast from any indecent act or speech.
3. To help the poor and needy.
Zakat al-Fitr is Wajib and must be distributed during a particular period of time. If one misses the time period without a good reason, they must make it up. This form of charity becomes obligatory from sunset on the last day of fasting and remains obligatory until the beginning of Eid prayer (i.e., shortly after sunrise on the following day). However, it can be paid prior to the above-mentioned period, as many of the Sahabah (companions of the Prophet) used to pay Sadaqah al-Fitr a couple days before the `Eid.

Zakat for wealth

Zakat for wealth is obligatory in the following different type of wealths;
Zakat of gold and silver:
Zakat is due on gold and silver if they reach the minimum threshold. The nisab for zakat on gold is twenty Mithqal[2], and the minimum amount of zakat on silver is two hundred dirhams[3]. Whoever possesses the nisab of gold and silver, a quarter of a tenth (1/40) should be paid as zakat. It will come out in twenty Mithqal, half Mithqal of gold[4]. And it comes out in two hundred dirhams, five dirhams[5].
Adulterated gold comes under the ruling of pure gold if the gold is predominant and adulterated silver comes under the rule of pure silver, if silver is predominant.
But if the added substance is predominant, then adulterated gold and adulterated silver come under the zakat rules for trade goods. There is no zakat on what exceeds the nisab until the excess reaches one-fifth of the nisab according to the imam to Hanifa.
And the two imams Abu Yusuf and Muhammed - may God have mercy on them - said: A quarter of a tenth is obligatory in everything that exceeds the nisab, whether the excess reaches one fifth of the nisab or not.
The one who owns the nisab has options; if he wills he can take out the zakat of gold and silver from itself by weighing. Otherwise, he can calculate the value of the amount of zakat in the existing currency, and distribute it in the form of currency.
If he wants, he can pay zakat in the form of any goods or anything that is measurable according to the value of zakat for gold and silver.
Zakat of business goods:
Anything other than gold, silver, or animals can be a business good.
Zakat is obligatory on goods according to the following conditions:
1. The owner shall have the intention to do business with this particular good once he owns it.
 2. The value of the goods must reach a nisab of gold or silver. A Muslim merchant calculates all his trade goods at the completion of the commercial year. If its value, according to the market price, reaches the nisab, he must pay its zakat, by giving out a quarter of a tenth of it.
3. The evaluation of commercial goods will be based on the existing currency in the country of the merchant. This does not include the value of furniture and appliances in the shop that are necessary for trade.
4. If he owns land, real estate, or animals, which he intends to trade in it, the year of zakat begins from the time he actually begins trading.
Zakat of Debt:
Debt with regard to the payment of zakat is divided into three categories:
1- A strong debt.
2- Medium debt.
3- A weak debt.
1. Strong debt:
It is instead of the loan, and instead of the money of trade, if the debtor admits the debt, even if he is bankrupt. Likewise, if the debtor is not ready to admit, but the creditor is able to provide evidence against the debtor. If the debt is strong, the creditor must pay the zakat on the debt if he receives forty dirhams, and every time he receives forty, he takes out one dirham to zakat. He does not have to take out anything if he has less than forty dirhams according to Imam Abu Hanifa - May Allah be Pleased with him
The two imams Abu Yusuf and Muhammed, May Allah be Pleased with them, say: Zakat is obligatory on debt received, whether it be a small amount or huge amount. The year starts in a strong debt once the nisab is acquired, rather than the time at which the debt was received. So, zakat is due for the past years, but he does not have to pay it until he receives the money.
2- Medium debt:
It is not a debt of trade, rather, it is the price of something one has sold from his basic needs, such as a house, clothes, or food, and the price is not received yet from the buyer. In this case, zakat is not due on this debt unless you receive an amount that reaches the full nisab. If the debtor owed a thousand dirhams, for example, and the creditor took two hundred dirhams from it, he must pay out five dirhams.
The two imams Abu Yusuf and Muhammad - May Allah be pleased with them - said: Zakat is obligatory on the amount received from the debt, whether it is a small amount or a big amount. The two-year period in the medium debt is considered from the time when the nisab was acquired, to the time of calculation. Zakat is due for the past years, but he does not have to pay it until the payment has been made.
3- Weak debt:
It is what was in return for something other than money, such as a marriage portion or the obligatory wealth given to the woman as part of the marriage contract in Sharia. Because this amount is not given instead of some money the husband had taken from the wife earlier and likewise is the case in the blood money. Zakat must not be paid on a weak debt unless it acquires nisab itself, and a year has passed from the time of receipt. So, zakat is not required for past years on a weak debt.
Chapter 6

 The Categories of People Who Can Accept Zakat

God Almighty said: “The obligatory charity shall be only for the poor and the needy, and for those who work to collect it, and to influence hearts (to belief), for ransoming captives, and debtors and those who are in the Way of Allah and the destitute traveler. It is an obligation from Allah. Allah is all Knowing, Wise.” [Qur’an 9: 60].
The Qur’an mentioned eight categories on which zakat must be spent, but Sayyiduna Umar رَضِيَ اللّهُ عَنْهُ during his rule - prevented those whose hearts were reconciled from zakat, with evidence that Islam had strengthened itself and it relevant no more.
Here you can learn the categories who are zakat eligible as mentioned by the holy Qur’an in detail:
1. Faqir: He who has less than the nisab. It is permissible to spend zakat on someone who owns less than the nisab, even if he is physically fit and owns some earnings.
2. Miskin: He is the one who does not own anything at all.
3. Zakat worker: He is the one who collects zakat and he is given money according to his work.
4. Captives to be ransomed: They are the slaves who had written a contract to be free but could not pay the contract amount. This category does not exist now, but if this type is found, zakat must be paid to them.
5. The debtor: He is the one who owes a debt, and does not own an equivalent amount to the nisab after paying off his debt. It is better to spend the zakat fund on the debtor to pay off his debt than paying zakat to the poor.
6. Those who are in the Way of Allah: He is the poor who are cut off for holy war in the name of Allah, or the pilgrims who went out for the pilgrimage, and were unable to reach the Ka’ba as they do not have enough money for their expenses.
7. Destitute traveller: He is a traveller who has money in his homeland, but his money has run out on travel, so Zakat is spent on him and he is able to reach his homeland.
The one who is obligated to pay zakat is allowed to spend zakat on all zakat eligible categories explained above. Likewise, it is also permissible for him to spend the zakat fund on one category although the other categories are present.
Chapter 7

 How to Calculate Zakat

The calculation of zakat can be made using two methods. They are explained below so that you can learn these methods to do the zakat calculation yourself;
First method: This is the one-fourth method.The one who is obligated to pay zakat must collect and calculate all his possessions subjected to zakat and divide it by forty. If you have 5000 US dollars, which is the amount of zakat due on these funds, and the calculation process is as follows: (5000 ÷ 40 = 125) US dollars, this method is the easiest and fastest way to find out the amount of zakat due on funds.
The second method: This is the two and a half percent method. The one who is obligated to pay zakat must collect and calculate all his possessions subjected to zakat and multiply it by two and a half, then divide the result by one hundred. The result then obtained is the amount of zakat that he owes on. If you have 5000 US dollars, then the arithmetic process is as follows: (5000 x 2.5 = 12500 ÷ 100 = 125) US dollars.
In order to calculate your precise zakat amount you can go for the assistance of zakat calculator websites or applications designed under the supervision of the scholars of Ahlu Sunna wal Jmaa’. There you will enter the details regarding your different kinds of assets and the calculator will tell you how much zakat to give.
Chapter 8

How to Pay Zakat online

You can spend your zakat online as you do it conventionally. For that, you have to go through the same above steps and calculate the zakat amount. It is not required that the zakat must be delivered to the one who is entitled to it by hand. It can be transferred by sending it through the bank. If a sum of money is deposited into the account of the person, who is eligible for zakat directly or by bank transfer and the account holder receives the amount it is considered as the acceptance of zakat.
[1] What is nisab? Nisab refers to the particular amount that makes the zakat obligatory, which is pre-fixed in the sharia. This may differ according to the property.
[2] 20 Mithqal is said to be 85 grams approximately
[3] This is equal to 595 grams approximately
[4] Which is equal to 2.125 grams approximately
[5] Which is equal to 15 grams approximately

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SimplyIslam Academy, a subsidiary of SimplyIslam.sg, is an online Islamic education centre, delivering quality Islamic courses via online since early 2021.

The online Islamic school provides indispensable learning on the various sciences of Islam, covering Qur’an, Hadith, Sirah, Fiqh, Tasawwuf, and others.

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