Your Questions About Zakat Answered

Zakat is due upon the individual who owns the jewelry; therefore it is not your responsibility to pay on your wife's Zakat and cannot be an expectation from you. If you want to do it and you have the ability, that is your choice.

No, you cannot give Zakat to your parents or grandparents. This is because supporting your parents is already your responsibility. One cannot give Zakat vertically in the family tree (to parents, grand parents, children, etc). However, one can give Zakat horizontally across the family tree (to siblings, cousins, etc). 

If wealth goes below the Nisab at any given time during the year, then Zakat is not obligatory. You are liable to pay Zakat once you have reached the Nisab threshold and have maintained that amount for an entire lunar year. Once you have reached the date from which a full lunar year has passed, only then is Zakat due.

Yes. Students do have to pay Zakat if they are above the Nisab level. As long as someone's net Zakatable assets are above Nisab, they pay Zakat. Example: A student could have 10,000 cash and a 10,000 student loan. The loan is however not due until much later and he/she is making no payments toward it yet. So as long as this student has held 10,000 in their bank account for 1 full year, then they must pay Zakat on it (or on any portion of this that is unspent for 1 year).

1. The property you own and live in yourself - If you own a property and you live in that property then there is no Zakat due on it. 

2. Rental Property - If you own property that is being rented out then Zakat is not due on the value of the property. However, Zakat is due upon the rent you have accumulated from the rental income. Any expenses incurred during the year for the rental property can be deducted. 
   
   For example: Monthly Rent = $1,200
   Monthly Expenses = $200
   Net Rent = $1,000/Month
   
   Total Zakatable amount for the year =$12,000
   Zakat due = $300
   
   Please note: If your money goes into a central bank account where you keep all your cash (including cash from rental income) then there is no need to calculate this separately since it will be included in your cash totals. 

3. Property for sale or with the intention to sell - Zakat is due upon a secondary property for sale (aside from the property that you own and live in) that is either marked for sale or that which you have a clear intention to sell. Zakat is calculated based on the value of the property at the time of selling, or the value at which the property is sold.
   
4. No intention - there is a possibility that you are not clear about the intent behind the property or asset. If this is the case, then there is no Zakat due upon it until you fall under category B or category C as stated above.

Zakat is not due upon earnings that are from haram sources. Rather, that wealth should be disposed of by giving it in charity, and through seeking forgiveness from Allah.

Yes, you may be entitled to pay Zakat if you have a student loan. If you are not making any payments toward your loan right now, then there is nothing for you to deduct and you will simply pay Zakat on your net zakatable assets. 

If you are committed to a monthly repayment program toward your student loan, then you may deduct 12 month’s of upcoming principal payments (not interest). Example: you have $5000 in the bank. You pay $200 per month toward your student loan, of which $150 is toward the principal and $50 is interest. So, $150 x 12 months = $1800. This $1800 is your deductible. Your Net Zakatable assets are $5000 - $1800 = $3200. Zakat rate of 2.5% applied to $3200 = $80 Zakat due.

It should be noted here that if one has the ability to pay off an interest-bearing loan sooner than later and avoid as much interest as possible, then this is highly encouraged and a much greater priority than Zakat.

Zakat is due when all conditions of Zakat liability are met. 

1. The individual must be Muslim
2. The individual must be free (not a slave)
3. Wealth must be above Nisab and possessed for the span of one lunar year
4. Nisab is either the value of 85g of Gold or 595 g of Silver
   National Zakat Foundation follows the opinion that Zakat is due once a person’s wealth amounts to 595 g of silver (or the cash equivalent) 

There is another condition of adulthood and sanity which is not agreed upon. National Zakat Foundation follows the opinion that states the guardian should pay Zakat on the wealth of someone who is below the age of puberty, or whose sanity is questionable.

For a business, all liquid assets are liable for Zakat. These include:

• Cash
• Finished goods
• Work in progress
• Raw materials
• Accounts Receivable (strong debts), i.e. money owed to the business that is likely to be received.

Please note, National Zakat Foundation follows the opinion that Zakat is due upon the wholesale price of your inventory or goods for sale. What do we mean by wholesale price? If someone wanted to buy this inventory or your goods in bulk what price would you sell it to them for. This amount would be the liable portion of your Zakat. If you decide to pay Zakat on the retail price, then you are going above what is required and doing ihsaan (Excellence). Many scholars stated this because your Zakat will benefit more people as you are paying more.

After adding together all your assets, you must then deduct expenses and liabilities that you have within the business that are to be paid within the lunar year of your calculation (certainty has to exist in the liability). For example, this includes accounts payable, rental costs, bills, salaries and etc. 

Business Assets = Cash + Value of Inventory + Value of Work in Progress + Value of Raw Materials + Accounts Receivable

Business Liabilities = Outstanding Rent, Bills, & Salaries + Value of outstanding short-term commercial loans + the next year’s non-interest portion of long-term business debt + total value of goods purchased on credit

Zakatable Amount = Business Assets - Business Liabilities

Zakat Due = Zakatable Amount x 2.5%

Zakat is only due on Gold and Silver in Jewelry. All other metals and precious stones are not liable for Zakat. To identify the Zakat due upon your jewelry, you must determine the weight of gold and/or silver in your jewelry, and then determine the value of gold and/or silver.

Gold and silver can be valued at its resale value by a jeweler or you can multiply the number of grams (of gold or silver) you own by the current market value.

In order to calculate Zakat on silver and gold you must take into consideration the following:

• The purity of the gold and silver within the jewelry.
• 24K gold is considered pure gold
• To find the purity percentage of your gold, you must divide the karat value of your gold by 24 (the karat value of pure gold)
• The weight of the gold and silver within the jewelry.
• This is the true grammage of the amount of gold or silver within the jewelry and is based on the purity percentage
• To find the true grammage of your gold or silver, you multiply the total weight of gold or silver in your jewelry by the purity percentage
• The value of the gold and silver within the jewelry.
• This is determined by the current value of gold and silver on the Zakat calculation date

• For example, if you have 100g of 18K gold, you would calculate as follows:
• Purity Percentage = 18/24
• True Grammage = 100 x Purity Percentage
• Value = True Grammage x Current Value of Gold (per gram)
• Zakat Due on Jewelry = Value x 2.5%

Zakat is mandatory depending on your specific circumstances. Debt that qualifies towards deduction from Zakat eligibility are amounts you plan on paying back within one lunar year from your Zakat payment date. Once you have deducted your debt value, if the remaining value of your assets go below the Nisab requirement then you would not be liable to pay Zakat. If the value remains above the Nisab requirement, then you are required to pay Zakat on the remaining amount after payment of debt. If you plan on paying back a debt past the one lunar year mark, that value of debt is not eligible for deduction. Similarly, after taking into consideration your debt value, if you remain above the Nisab requirement then Zakat is still obligatory upon you.

There is no fee. One is recommended to make repentance and simply pay the Zakat on missed years, according to what was supposed to be paid. One must go back and calculate their Zakat based on their previous wealth, gold/silver prices, and applicable Nisab values. National Zakat Foundation provides a one-on-one service in this area.

Email zakat@nzfcanada.com to set up an appointment for missed Zakat calculations.

The way to calculate Zakat is to do so in accordance with what you have on the Zakat anniversary date. If you have an increase in wealth just before your Zakat anniversary date you will include that amount towards your zakat calculation.

Zakat is due on agriculture upon the harvest of the crops and based on how water was provided for them. There are three possible Cultivation Zakat amounts that are due when the crops are harvested:

• All watering due to Rain or rivers: 10%
• Watering is all by your efforts (artificial): 5%
• Watering with a mix of above two options: 7.5%

You can pay your Zakat with the harvest itself, and scholars have also allowed for the monetary amount to be paid in its place. 

Most people don't know when they are liable to pay Zakat. One of the main elements in becoming liable to pay Zakat is called Nisab. Nisab is the minimum threshold of wealth a person must own at which Zakat becomes payable. Once Nisab is reached and a person stays above the Nisab an entire lunar year without going below it they become liable to pay on that specific date (Hijri date). For example, if someone goes over the Nisab on the 20^th of Ramadan and they stay above it the entire year they are liable to pay Zakat on the next 20th of Ramadan or before it.

The Nisab of silver is equivalent to 200 Dirhams or 595 grams. Nisab is the minimum threshold of wealth a person must own at which Zakat becomes payable. Most scholars prefer the lower value (silver nisab) be used because this results in more people paying Zakat and more people getting assistance from Zakat.