Zakat – the obligatory alms

1Purification and growth

The Arabic word zakat carries two meanings: purification and growth. Both describe beautifully what zakat does. It purifies wealth – of the share that really belongs to others – and it purifies the heart of stinginess and excessive attachment to money. And it makes things grow: the blessing in one's wealth, the bonds within the community and the reward with Allah.

Allah says to His Prophet ﷺ: "Take from their wealth a charity by which you purify them and cause them increase, and pray for them; indeed, your prayer is a reassurance for them" Quran 9:103. And the Prophet ﷺ said: "Charity does not decrease wealth" (reported by Muslim). Whoever gives does not lose – even if the numbers on paper seem to say otherwise.

The Quran describes the believers as people "in whose wealth there is a known right for the one who asks and the one who is deprived" Quran 70:24–25. The word right matters: what the person in need receives is not a handout but their share.

2A pillar of Islam

Zakat is the third of the five pillars of Islam, after the testimony of faith and the prayer (al-Bukhari and Muslim). In the Quran it is mentioned again and again in the same breath as the prayer: "And establish prayer and give zakat and bow with those who bow" Quran 2:43. Prayer connects a person with Allah; zakat connects them with people. The two belong together.

When the Prophet ﷺ sent his Companion Mu'adh ibn Jabal to Yemen, he told him to inform the people that Allah had made a charity obligatory on them, "taken from their rich and given back to their poor" (al-Bukhari and Muslim). That one sentence contains the whole system: zakat stays within the community and flows from those who have to those who need.

How seriously the Quran takes this is shown by its warning to those who hoard gold and silver and do not spend it in the way of Allah Quran 9:34–35. According to a statement going back to Ibn Umar, wealth on which zakat has been paid is not such a hoarded treasure.

The attitude matters too. Zakat is not a favour handed down from above. It is a right of those in need, established by Allah Himself. Whoever gives it fulfils a duty – and does so best quietly, kindly and without making the recipient feel ashamed.

3Who has to pay zakat?

Zakat is obligatory for every Muslim who meets these conditions:

• They are Muslim and hold the wealth in full ownership, free to dispose of it.
• Their zakatable wealth reaches the nisab, the minimum threshold.
• This wealth stays at or above the nisab for a full lunar year (Arabic hawl).
• It is wealth that can grow or is held as savings – money, gold, silver, trade goods, livestock, crops – not things in everyday use.

The lunar year is about eleven days shorter than the solar year. Many Muslims therefore choose a fixed date in the Islamic calendar – some pick a day in Ramadan, because good deeds in that month are especially blessed.

Whether the wealth of children is subject to zakat is assessed differently by the schools of law: the Maliki, Shafi'i and Hanbali schools say yes, and the guardian pays the zakat from the child's wealth. The Hanafi school says no, except for crops and zakat al-fitr. It is worth asking a scholar.

When your wealth goes up and down during the year

According to Hanafi teaching, what matters is that the nisab is present at the beginning and the end of the year; fluctuations in between change nothing, and money received during the year is simply counted on your zakat date. According to the Shafi'i and Hanbali schools, the nisab must be present throughout the year, and newly received money strictly speaking has its own year. In practice many people keep it simple: on their zakat date they add up everything they own and pay on it. If in doubt, that means giving a little more rather than too little.

4The nisab – the minimum threshold

The nisab goes back to the time of the Prophet ﷺ. He said: "No charity is due on less than five awaq" (al-Bukhari and Muslim) – five awaq of silver equal two hundred dirhams. For gold the nisab is given as twenty dinars, as in a narration from Ali in Abu Dawud. Converting the weight of a dinar (mithqal) at about 4.25 grams and that of a dirham at about 2.975 grams gives the figures most commonly taught today:

• 85 grams of gold (20 × 4.25 g), or
• 595 grams of silver (200 × 2.975 g).

These figures are a common reference point, not a number everyone has agreed on. Because the old weights are converted in different ways, some scholars and institutions, especially in South Asia, work with slightly different values, such as 87.48 grams of gold and 612.36 grams of silver.

For gold and silver themselves the matter is clear. For cash and bank balances, however, the question arises which of the two values to use. Here scholars differ: some recommend the silver value because it is lower and so obliges more people to pay zakat – in favour of the poor. Others use the gold value because it is closer to today's purchasing power. Both views have their reasoning. Follow the opinion you trust and apply it consistently.

The day's price decides

Expressed in money, the nisab is not a fixed sum. It depends on the price of gold or silver on your zakat date and moves with it. In the Prophet's time twenty dinars and two hundred dirhams were worth roughly the same. Today gold has become far more expensive relative to silver, so the gold-based nisab is many times higher than the silver-based one. The choice between them is therefore no small matter.

Zakat institutions handle this differently: some use the gold value, some the silver value, and many publish the current nisab regularly. If you pay your zakat through an institution, ask which standard it uses. To work it out yourself: number of grams times the price per gram on your zakat date.

5How much? 2.5 percent

For the most common kinds of wealth, zakat is 2.5 percent – one fortieth:

• Savings: cash, bank balances, fixed deposits and similar reserves.
• Gold and silver: bars, coins and investments. For jewellery worn personally there are different views: the Hanafi school considers it zakatable, while the majority of the other schools do not, as long as it is worn within normal custom.
• Trade goods: goods you hold for resale, valued at market price on your zakat date.

Those who calculate zakat by the solar rather than the lunar year – for example to match a financial year – make up for the roughly eleven extra days. Contemporary bodies such as the AAOIFI Shari'ah standard for Islamic financial institutions give a rate of about 2.577 percent for this.

Things for personal use, on the other hand, are not subject to zakat: your home, your car, your furniture, your clothes, the tools you work with.

Today's kinds of wealth

Many forms of today's wealth were unknown to classical law. Contemporary scholars and expert bodies have developed guidelines that differ in detail. Commonly taught:

• Shares and funds held for trading count at their market value on your zakat date. For long-term investments, many calculate zakat only on the zakatable portion of the company's assets, such as cash, receivables and inventory.
• Rented-out property is not itself zakatable; but rental income you have saved is part of your wealth.
• Property bought for resale counts as trade goods at its market value.
• Money owed to you: according to many scholars, money someone owes you and will surely repay is included. For doubtful debts the common view is that you pay once you receive the money; whether also for past years is disputed.
• Pension entitlements and end-of-service benefits that you cannot yet access are assessed differently by scholars.

6Other kinds of zakat

Crops

Allah says: "… and give its due on the day of its harvest" Quran 6:141, and: "Spend from the good things which you have earned and from that which We have produced for you from the earth" Quran 2:267. For crops the rate is 10 percent if the land is watered by rain or springs, and 5 percent if it is irrigated with effort and cost – as reported by al-Bukhari. Zakat becomes due from a minimum quantity of five wasq (al-Bukhari and Muslim), an old measure of volume that is converted today to several hundred kilograms; the conversions differ. There is no hawl for crops; zakat is due at harvest time. Which crops exactly are zakatable is defined more narrowly or broadly by the schools – from a few staple foods to almost everything the soil produces.

Livestock

Camels, cattle, and sheep and goats that graze freely for most of the year have their own thresholds: camels from five animals, cattle from thirty, sheep and goats from forty. For forty to one hundred and twenty sheep, for example, one sheep is due – as stated in the letter on zakat that Abu Bakr wrote according to the Prophet's ﷺ instructions (al-Bukhari). The further levels are described in detail in the books of the schools of law. Whether animals that are fed or used for work are also zakatable is disputed; the majority says no.

Trade goods and businesses

Goods you hold with the intention of resale are zakatable according to the four Sunni schools; in the Ja'fari school, zakat on them is recommended. If you run a business, on your zakat date you add up: inventory at market value, cash and bank balances, secure receivables – and subtract short-term business debts. Shop fittings, machines, vehicles and premises used for work are not included.

Treasures from the ground

For treasure from pre-Islamic times buried in the ground (rikaz), the Prophet ﷺ said: "And on rikaz there is one fifth" (al-Bukhari and Muslim). For minerals such as ores the schools of law have their own rules.

7Step-by-step calculation

The calculation is simpler than many people think. Here is how to proceed:

1. 1Set your zakat date – ideally a fixed day in the Islamic calendar.
2. 2Add up your wealth: cash, bank balances, gold and silver (at the day's value), trade goods (at market value) and money owed to you that you are confident will be repaid.
3. 3Subtract debts that are due: many scholars allow you to deduct debts that are due now. How long-term loans are treated is assessed differently.
4. 4Compare with the nisab: if the result is below the nisab, no zakat is due.
5. 5Calculate 2.5 percent: if it is above, and at least the nisab was held throughout the year, you give 2.5 percent of the whole amount.

A simple example

Let us use round numbers. On your zakat date you have:

• 30,000 dirhams in the bank,
• 10,000 dirhams in cash,
• trade goods worth 10,000 dirhams,
• and 2,000 dirhams of debts that are due now.

Your zakatable wealth is therefore 30,000 + 10,000 + 10,000 − 2,000 = 48,000 dirhams. Suppose this is above the nisab and your wealth stayed at or above the nisab all year. Then your zakat is 48,000 × 2.5% = 1,200 dirhams. A handy trick: divide the amount by 40 – the result is your zakat. If you calculate by the solar year, it would be 48,000 × 2.577% ≈ 1,237 dirhams.

An example from farming

A farmer harvests 10,000 kilograms of dates from palms irrigated with pumps. The quantity is well above the minimum, and because the irrigation involves effort and cost, the zakat is 5 percent: 500 kilograms of dates. If the palms were watered by rain or springs alone, it would be 10 percent, that is 1,000 kilograms.

8Who receives zakat?

Allah Himself has named the recipients: "Zakat is only for the poor and the needy, for those employed to administer it, for those whose hearts are to be reconciled, for freeing captives, for those in debt, for the cause of Allah and for the traveller – an obligation from Allah" Quran 9:60. These are eight categories:

1. 1The poor (al-fuqara), who own hardly anything.
2. 2The needy (al-masakin), whose income does not cover the basics.
3. 3Zakat administrators, who collect and distribute it.
4. 4Those whose hearts are to be reconciled, for example new Muslims who need support.
5. 5Freeing people from bondage and captivity.
6. 6Those in debt who cannot repay it by their own means.
7. 7In the cause of Allah – a category whose exact scope scholars define differently.
8. 8The traveller who has fallen into hardship on the way, even if wealthy at home.

Zakat is not given to one's own parents, grandparents, children or grandchildren, nor to one's spouse, since supporting them is already your duty. Siblings, uncles, aunts and other relatives in need, however, may receive zakat, and many scholars see a double reward in it: for the giving and for upholding family ties.

Good to know

• One category or several: According to the majority of scholars, you may give all your zakat to a single category or even to a single person in need. The Shafi'i school, by contrast, holds that it should be distributed among the categories that are present.
• The intention counts: Zakat requires your intention (niyyah) to give it as zakat. According to the common view you do not have to tell the recipient – which spares their dignity.
• Muslims and non-Muslims: According to the great majority of scholars, zakat on wealth goes to Muslims in need; sadaqa, by contrast, may go to any person in need.
• The Prophet's ﷺ family: According to both Sunni and Shia teaching, the descendants of the Prophet ﷺ from the clan of Hashim do not in principle receive zakat (Muslim); the schools of law regulate the details differently.
• Do not forget the quiet ones: The Quran reminds us of people in need whom others think rich "because of their restraint" Quran 2:273. Often they are precisely those who never ask.
• Abroad? Many scholars prefer that zakat be distributed where one lives. Most, however, allow giving it in another country when needy relatives live there or the need is clearly greater; the schools differ in how strict they are here.

9Zakat al-fitr at the end of Ramadan

Besides zakat on wealth there is zakat al-fitr, the payment for breaking the fast. Ibn Umar reports that the Prophet ﷺ made it obligatory on every Muslim – male and female, young and old, free and unfree: one sa' (an old measure of volume, commonly converted to roughly 2.5 to 3 kilograms) of dates or barley, and he commanded that it be given before the Eid prayer (al-Bukhari and Muslim). Ibn Abbas describes its purpose: it purifies the fasting person from idle talk and is food for the poor (reported by Abu Dawud).

The head of the household gives it for himself and everyone he provides for. Today a staple food of the country is usually given, such as rice. Whether one may give its value in money instead is a well-known difference of opinion: the majority of scholars prefer food, while the Hanafi school and many contemporary scholars permit the money value, because it often benefits those in need more. In the Emirates the competent authorities set an amount each year as guidance.

It should reach those in need before the Eid prayer at the latest. The Companions gave it a day or two before the festival (al-Bukhari); the Hanafi and Shafi'i schools allow it to be paid earlier in Ramadan. In the Ja'fari school, too, zakat al-fitr – often called fitra there – is obligatory: one sa' of a staple food or its value in money. You can read more about the festival in the chapter The important days of the Islamic year.

10Sadaqa – voluntary giving

Zakat is the obligatory measure. Beyond it, Islam opens the door to sadaqa, voluntary charity – at any time, in any amount, to anyone in need, including non-Muslims. The Prophet ﷺ said: "Every act of kindness is sadaqa" (al-Bukhari and Muslim). A kind word, helping someone carry a load, removing a stone from the path – all of it counts.

The Quran describes the reward of giving in an image: whoever spends their wealth in the way of Allah is like a grain that grows seven ears, in every ear a hundred grains, "and Allah multiplies for whom He wills" Quran 2:261. Shortly afterwards it warns: "Do not invalidate your charities with reminders or injury" Quran 2:264. And: "If you disclose your charitable giving, it is good; but if you conceal it and give it to the poor, it is better for you" Quran 2:271.

No one is too poor for sadaqa. The Prophet ﷺ said: "Protect yourselves from the Fire, even with half a date" (al-Bukhari and Muslim). And: "The upper hand is better than the lower hand" – the giving hand is better than the taking one (al-Bukhari and Muslim).

A special form is sadaqa jariya, ongoing charity. The Prophet ﷺ said: "When a person dies, his deeds come to an end except for three: an ongoing charity, knowledge from which benefit is derived, or a righteous child who prays for him" (Muslim 1631). A well, a schoolbook, a tree, a mosque, a copy of the Quran from which others read – all of these can keep working long after we are gone.

A classic form of ongoing charity is the waqf, the endowment. Umar owned land in Khaybar and asked the Prophet ﷺ what to do with it. He advised him to keep hold of the land itself and give its yield in charity (al-Bukhari and Muslim). Over the centuries this idea gave rise to wells, schools, hospitals and mosques – and today, too, one can take part in endowments with small amounts.

11Khums in the Ja'fari school

In the Shia Ja'fari school there is a second financial duty alongside zakat: khums, the "fifth". It is based on the verse: "And know that whatever you obtain of spoils, a fifth of it belongs to Allah and to the Messenger and to the near relatives …" Quran 8:41. According to Ja'fari teaching, this duty applies not only to the spoils of war but above all to the surplus of annual income: whatever remains of one's earnings at the end of one's own khums year, after the expenses for oneself and one's family have been met, one fifth of it is given. A few further categories are added, such as minerals and found treasure.

Khums is divided into two halves: the share of the sadat goes to needy descendants of the Prophet ﷺ, and the share of the Imam is used for religious and social purposes in agreement with a recognised scholar (marja'). In this school zakat is limited to nine things: wheat, barley, dates, raisins, gold and silver coins, camels, cattle, and sheep and goats.

The Sunni schools understand the verse more narrowly and relate the fifth mainly to spoils of war and buried treasure. Both readings rest on careful interpretation. Those who follow the Ja'fari school go by the rulings of their marja'. More in the chapter The Ja'fari School.

12Zakat in the Emirates

Here in the Emirates, giving is deeply rooted in the culture. Zakat is a personal religious duty here: the state does not collect it like a tax, but it offers official ways to pay it. If you prefer not to distribute your zakat yourself, you can pay it through the official state zakat body – known for many years as the Zakat Fund – and through officially licensed charities. They verify the need of recipients and make sure the gifts arrive where they are needed. Many of them also offer a zakat calculator, publish the current nisab and answer questions.

A few pointers for life here:

• Only through licensed bodies: Collecting donations requires a permit in the Emirates. So give your zakat and donations to official or licensed institutions, not to unknown collectors – online included.
• Zakat to your home country: Many people in the Emirates have family in other countries. As described above, many scholars allow zakat to be given to relatives in need abroad. Use safe, official channels for it.
• Businesses: Companies face their own questions in calculating zakat; specialists in Islamic finance can help.

Always give your zakat to trustworthy, licensed bodies – that way you fulfil your duty with a clear conscience.

13Ask a scholar about your case

The basic rules of zakat are clear, but life is varied. In the following cases it is especially worth asking a scholar of your school or an official zakat body:

• You own gold or silver jewellery and are unsure which view to follow.
• You have shares, funds, pension entitlements or an end-of-service benefit not yet paid out.
• You run a business or hold a stake in a company.
• You have debts, such as a mortgage or a car loan, and wonder how much you may deduct.
• You did not pay zakat in past years and want to make it up.
• You manage wealth for a child or a relative.

This page gives an overview and does not replace personal advice. Asking a good question of the right person is itself part of the care with which a duty is fulfilled.

14A closing thought

In the end, zakat is a reminder that everything we own is a trust. It ultimately belongs to Allah, and He has set aside a share of our prosperity for others. Whoever takes this to heart gives not with a heavy heart but with gratitude. If you would like to read the verses in which Allah calls us to give, you will find them with translation and tafsir on our Quran page – for example in Surah at-Tawbah and at the end of Surah al-Baqarah.