The Short Answer
God does not “exempt” anyone from Zakat. “Exemption” — the process of becoming or state of being free from a bound duty — does not apply to Islam’s Zakat obligation. (See What Is Zakat?)
One either qualifies to pay Zakat or does not, or qualifies to receive it or does not. One may, however, neither qualify to receive or pay Zakat, or qualify to both pay and receive it.
What people do not have to pay Zakat?
In general, four categories of people do not pay the Zakat-alms required yearly of Muslims: the poor, the indigent, the debt-ridden, and the unfree.
What qualifies people to pay Zakat?
Muslim scholars agree that four conditions obligate one to pay Zakat, though a majority do not require conditions 2 and 3:
Belief (One is a Muslim.)
Puberty (One has come of age.)
Sanity (One is mentally sound.)
Minimum Affluence (One has sole possession of Zakat-eligible wealth at the prophetically set threshold amount, called niṣâb, for its established term or on its Zakat Due Date (see Nisab and Zakat Calculation in a Nutshell).
Why must one be a Muslim to pay Zakat?
As a “Pillar” of ritual worship in this religion, Zakat requires belief in Islam. One who does not believe in Islam cannot, by definition, fulfill the worship condition of the Zakat obligation.
This has two real-world consequences. First, even in their own Islamic polity, Muslims cannot impose Zakat on people of other faiths who live within it. Allah has categorically forbidden in the Quran coercion of any sort when it comes to faith. There shall be no compulsion in religion! (Sûrat Al-Baqarah, 2:256).
Likewise, there can be no divine reward for one who acts absent an intention of belief in God. Yet whoever belies faith in God, his good work shall assuredly be rendered utterly futile (Sûrat Al-Mâ’idah, 5:5).
The scholars cite as proof for this condition of belief the report of the Prophet, on him be peace, when dispatching his Companion Mu‘âdh, God be pleased with him, as his emissary to the then-Christian community of Yemen:
You are going to a people with a [Heavenly] Book. When you come to them, call them to bear witness that there is no God but the One God, and that Muhammad is the Messenger of God. If they consent to you in this, then teach them that God has made personally obligatory on them five prayers in each day and night. If they consent to you in this, teach them that God has made personally obligatory on them a charitable offering in their property, taken from their rich and returned to their poor (Bukhari).
The point here is that one’s witness to faith as a Muslim is a prerequisite to Islam’s obligations becoming effective on that person. (It is the province of Allah alone as to what He will call people to account for before His Seat of Judgment.)
This brings us to the second meaning of this precondition of belief. Those who newly embrace Islam do not owe the Zakat due for their years before becoming Muslim, a position held by many eminent scholars. (By the same logic, such scholars, as from the Shâfi‘î legal school, state that once a believer’s Zakat comes due, it remains owed, regardless of any change of conviction, similar to other financial obligations one incurs. Ḥanafî jurists differ.)
What of the pre-pubescent and the insane, conditions 2 and 3 above?
There is scholarly agreement on people who meet the four qualifying conditions for individuals cited previously, that they are, in principle, liable to pay Zakat.
But a large majority of scholars — and notably before them, the illustrious Companions of the Prophet, on him be peace, strongly identified with adjudicating legal cases and luminaries of the two generations that followed them similarly recognized — granted no exception for Zakat based on these two conditions.
Zakat collection and payment, in their demonstrated practices and judgments, applied to the wealth of Muslims in general and “personally obligatory” on each one, or for their guardians to act on their wards’ behalf and in their interest. (See Are Children and Those Lacking Mental Capacity Obligated to Pay Zakat?)
Who are the people who qualify to not pay Zakat but to receive it?
Zakat is a direct Heavenly contradiction and limitation to the recurring notion among human beings that there is human sovereignty on earth. It also opposes the unrestrained exercise by some human beings over others of such sovereignty.
In other words, God did not leave it to men in power — not even to his prophets — to determine who should receive the wealth of the alms He requires them to pay and to collect from the people of obligation. He Himself revealed in the Quran the eight categories of eligible recipients of Zakat distribution:
The poor (Al-Fuqarâ’)
The indigent (Al-Masâkîn)
Those with hearts to be reconciled
Those in bondage (slaves and captives)
In the cause of God
The wayfarer (the stranded or traveling, lacking or separated from resources)
The first two categories of people, and the fifth and sixth, God disqualifies from paying Zakat and qualifies for receiving it because of their profound material deprivation and the overwhelming duress of their life needs. Indeed, God has prescribed Zakat for their sake.
This gives us a working definition of Zakat. It is a share out of the entirety of growing wealth God has given to people that He retains as a divine investment on behalf of His select recipients, which becomes payable to its rightful owners – the people of the eight categories — upon that wealth’s maturity.
Hence, Zakat is not a gift from the well-off to their needful, vulnerable, and deserving relatives and community fellows. It is their remittance to these divinely chosen people of their vested due. These recipients become the rightful owners of that specified Zakat wealth on its due date. One who withholds Zakat’s payment, even for a day, usurps another’s property. (See When Is Zakat Due?)
What defines the conditions of these particular Zakat recipients?
The Poor and the Indigent
God, of course, could have melded these two categories into one, but He did not. Therefore, most scholars distinguish the poor from the indigent. Some identify the category of “poor” as those who cannot obtain sufficient wealth to satisfy life’s essentials for themselves and their dependents but whose modesty keeps them from asking of others. The indigent they define as those whose dire need drives them to ask of others.
Other scholars draw varied distinctions across a spectrum of need that runs from total deprivation; to lack of wealth that rises to the level of the Zakat payment threshold, especially in terms of money; to a dearth of essential wealth provisions other than money.
Most scholars hold that the determining factor for both these categories comes down to anyone whose earnings and wealth cannot meet the living expenses of the individual and his or her family’s essential needs. The operative notion here, as recorded in one of the statements of the Prophet, on him be peace, is the right to obtain “sufficient sustenance.”
The Unfree in Bondage
God has authorized Zakat to free the enslaved and the captive. Zakat for this fifth category, like the three categories that follow it, does not go directly “to” the recipients, as it does to the people of Zakat’s first four categories of distribution. Rather, it is dispensed “for” the benefit of those trapped in these conditions. Islam has been foremost historically in urging the emancipation of slaves and seeking its elimination.
An increasing number of modern scholars have discussed the notion of Muslims oppressed and humiliated by imperious powers over them as enslaved. In our own times, the Uighurs and the Rohingya, the Palestinians and the Kashmiris, the Muslims of India and Sri Lanka and, perhaps, now of France, may be said to suffer a modern-day form of enslavement. Others elsewhere endure the oppression of carceral captivity because of their faith.
These scholars have not formally included such peoples as qualifying as enslaved. They seek to maintain the integrity of the Quran’s entitled Zakat beneficiaries for God’s designated Zakat distribution categories. But they have broached this discourse and acknowledged that Zakat must find its way to legitimately benefit people subjugated in such dreadful circumstances.
People overwhelmed by debt who lack the income or non-essential assets to pay it off qualify for Zakat. Islam recognizes debt as one of the most stressful and debilitating burdens a person can come under in life. Scholars specify varying conditions that qualify one’s debts for Zakat payment, which leads to differing rulings about who counts as debt-ridden. The Ḥanafîs in general rule that anyone who has debts he or she cannot satisfy qualifies for Zakat, provided one’s wealth falls below the threshold for paying Zakat (niṣâb).
The majority of scholars remove even this limitation of having niṣâb and allow for Zakat to go to debtors on behalf of the indebted, whether that debt is incurred for personal reasons or in the course of one conducting communal service or civic duties for good. They set its only limits on the source of the debt. It must spring from ḥalâl origins. Nor does it qualify for Zakat if it is a debt one owes to God, as for an expiation (kaffârah) payment, for example. Some scholars define Zakat as a debt to God, others as a debt to people, Zakat’s divinely authorized recipients.
Importantly, God does not require people to liquify their essential living assets or come under the imposition of duress to satisfy debts. Rather, it charges the Muslim community with providing debt relief, so long as that debt did not accrue from either sin or extravagance.
Where can one learn more about Zakat and pay it?
Zakat Foundation of America has an online Zakat Calculator to help easily and accurately calculate and pay Zakat (go to Zakat Calculator). It is a four-star (out of four stars), audited American and international charity offering plentiful, lifesaving and altering ṣadaqah (charity) avenues at home and worldwide (see zakat.org). It is also a noted clearinghouse of well-researched, accessible, reliable, and cross-referenced Zakat articles and for easy-to-use Zakat and charity tools.