What is Zakat?
Zakat, one of the core foundations of Islam's five pillars, is a mandatory form of charity applicable to all mentally sound, grown-up Muslims possessing wealth above a specific limit called the Nisab.
The idea of Zakat is a significant principle in Islam, emphasizing the values of fairness and unity in the Muslim community while also serving as a means to cleanse and purify one's accumulated wealth.
Given its obligatory nature for Muslims, we must grasp the various aspects of Zakat's requirements to effectively fulfill our responsibilities.
Who Has to Pay Zakat?
Zakat is a requirement for every mentally sound, grown-up Muslim who possesses wealth surpassing the Nisab value – this is due after a year of having that wealth.
The Nisab amount is determined using either 21 ounces of silver ($491.61 USD or 3 ounces of gold ($6040.29 USD) as of 17 Feb 2024. So, if your total wealth goes beyond the value of 21 ounces of silver or 3 ounces of gold, you have to pay Zakat after a year on that wealth.
It's important to note that Zakat doesn't apply to non-Muslims, individuals with mental challenges, or those whose wealth falls below the Nisab threshold.
“And be steadfast in prayer and regular in charity: And whatever good you send forth for your souls before you, you shall find it with Allah.”
Qur’an 2:110
How Much Zakat Should be Paid?
The standard Zakat payment usually equals 2.5% of your amassed wealth, and it becomes applicable one lunar year after it exceeds the Nisab value. This includes your cash, savings, investments, and specific types of property, among other things.
For example, if your total wealth is worth $5,000, and it has been one lunar year since you had that wealth, then your Zakat due would be 2.5% of that amount which is $125.
Muslims should be proud to give their Zakat as it is an act of worship that purifies your wealth, uplifts the marginalized, and promotes economic balance in society.
Keep in mind, the calculation of Zakat might get intricate if you possess various forms of wealth, so it's wise to seek guidance from an expert in such situations.
Who Should Zakat Be Given To?
Zakat should only be paid to specific categories of recipients, known as the "Eight Categories of Zakat Recipients" (Asnaf).
Your Zakat must reach the correct categories of people as Zakat to any other group other than those specified will technically not be considered Zakat.
These categories include the poor, the needy, those burdened with debt, those employed to collect and distribute Zakat, individuals striving in the cause of Allah, those whose hearts need to be softened towards Islam, and travelers who have become stranded - as decreed by Allah.
At IOU, we have several Zakat-eligible projects verified by our council of scholars. By donating to any of these projects, you will be fulfilling your Zakat obligations inshaAllah.
Zakat Eligible Projects
