What Are the Rules of Zakat?

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What Is Zakat?

Zakat is a charity God obligates Muslims to pay yearly, or at harvest, on their money, property, and crops. Its payment is made to the eight categories of poor, vulnerable, and deserving Allah Himself has set forth in the Quran (Surat Al-Tawbah, 9:60). The Prophet Muhammad, on him be peace, enshrined Zakat as the Third of the famed Five Pillars of worship Islam is built on.

What does the word ‘Zakat’ mean?

The literal meaning of the Arabic word ‘zakat’ is “increase,” as in “growth.” It also suggests “betterment” and “blessings,” as well as “purification” and “sweetening.”

Early in its 23-year period of gradual revelation, the Quran, Islam’s scripture, gave the Arabic word ‘zakat’ its current meaning for Islam’s prescribed almsgiving.

What makes Zakat different from charity in other faiths?

Islam obliges its followers of means to pay a yearly, compulsory poor due. This levy notably does not come at the discretion of its payers. The Prophet, on him be peace, as a part of Revelation specified the kinds of wealth out of which Zakat payments come directly due, their minimum amounts, and their rates of one-time-yearly payment.

Islam does not class Zakat as a simple good deed, though Allah immeasurably rewards it, but as an essential sacred rite – on par with the Pillar of worship with which Allah in the Quran most often pairs it: the five-times daily Salah-Prayer, which notably defines Muslim devotion and punctuates the believer’s day.

Individual Muslims are required by faith to learn Zakat’s rules and fulfill them correctly. This means assessing Zakat accurately on one’s various wealth streams and carrying out its proper distribution at its due times to its specified beneficiaries.

What are Zakat’s Requirements?

Zakat has three main conditions set by the Prophet, on him be peace, as part of Revelation:

  1. NISAB (threshold at which zakat becomes due). This marks the minimum quantity of a particular material good or wealth-type a person owns – becoming “wealthy” in it by measures Islam sets – from which one must pay Zakat. ‘Nisab’ in Arabic literally means ‘origin,’ because the right of the poor in one’s wealth-kind begins at this point of its accumulation. (See Nisab and Zakat Calculation in a Nutshell and What Is Nisab in Islam?)

  2. PAYMENT RATE. Each type of eligible wealth has a Zakat percentage. A 2.5% rate is assessed on all surplus personal and business wealth. Agricultural produce has a 5% or 10% Zakat rate, depending on natural watering or irrigation of crops. Livestock is gauged at itemized in-kind rates. Treasure troves (hidden windfalls and extraction of natural resources) one pays at 20%. (See How Is Zakat Calculated on Weatlh?)

  3. YEARLY PAYMENT (hawl). Each type of eligible wealth has a due date of payment. Surplus personal and business wealth and livestock come due exactly one lunar Islamic year (hawl) after its initial nisab is achieved or upon their established Zakat Due Date (ZDD). The Zakat of agricultural produce and treasure troves (hidden windfalls and extraction of natural resources) come due at time of harvest – and this is also the analogous ruling applied by many modern scholars for high wage and salary earners, to pay Zakat on its nisab-level increments upon receipt. (When Is Zakat Due? and Is Zakat Due on Income or Savings?)

Who Receives Zakat?

The Quran designates eight kinds of Zakat eligible recipients, sortable into three groups:

  1. The poor and the needy (top priority)

  2. Zakat’s collectors and those entitled to compensatory reconciliation

  3. For the emancipation of the enslaved and captive; the debt-ridden; those engaged in benevolent Godly causes; and the wayfaring (the stranded, migrants, the displaced, refugees, and the homeless)

(See What Is Zakat?)

What Benefit Do Zakat Payers Get?

While a Muslim must pay due Zakat to remain in the fold of Islam, its payment provides its givers both worldly and spiritual blessings.

It is a means of “purifying” the believer’s soul from sin and training it out of its inclination to greed. As a sanctified worldly financial transaction, it cleanses one’s wealth from its inherent material taint, keeping it, as it were, “sweet.” Zakat left mingled with one’s wealth, the Prophet, on him be peace, warns us, causes it to spoil and physically diminish. For Allah has made the temporal property He truly owns but gives us, in its reality, a spiritual commodity.

What does society gain from Zakat?

Zakat directly alleviates the poor and needful of worldly hardship, improving their life conditions while upholding their human dignity.

That is why Allah has established Zakat — not as a voluntary charity given to whomever at the discretion and goodwill of one’s wealthier fellows — but as the due right of His divinely designated recipients. Allah is the broker of the wealth He has invested with us. Zakat is the dividend of its surplus owed annually to His select beneficiaries at set due dates in specified amounts when His investments reach stipulated benchmarks.

Zakat is not intended to serve as a stopgap measure of short-term or one-time relief. It is meant to institutionalize and anchor a communal enterprise that systematically eliminates poverty and servitude on earth.

Zakat functions as the primary socio-financial institution of the global Muslim community. It aims at annually recalibrating the just human balance in society, fostering harmony between relatives and neighbors, and strengthening a shared unity and equitable social cohesion.

Zakat also gives a divinely deliberate incentive for the Muslim well-to-do to invest and not hoard their wealth, as hoarding is the major direct cause of poverty in humanity and wealth circulation through reinvestment spending raises all boats in the economic sea.

(See What Are the Economic Benefits of Zakat?)

Does Allah contrast Zakat with any other spiritual-financial practice?

Yes. All interest-bearing transactions (called ‘riba’ in the Quran) are the forbidden opposite of the obligatory Zakat-alms transaction. (See What Is Riba and Why Is It Forbidden in Islam? and What Types of Riba Are There?)

Allah specifically contrasts the divine losses that accrue to those who give riba (interest-bearing) loans to “gain” from people with the much-multiplied blessing He gives to those who pay the obligatory Zakat to the poor and needful for His sake alone.

Riba devours. Zakat multiplies.

Yet beware, for whatever you give others in interest – to gain increase from the wealth of people – shall never increase with Allah! But blessed is whatever you give of the Zakat-Charity – desiring only the Face of God. For it is such as these who shall have a much-multiplied reward.” (Surat Al-Rum, 30:39)

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