Zakat Eligibility Criteria: Who is Eligible and How to Pay Zakat

One of the five main duties in Islam is zakat. It is a charity that every eligible Muslim is due each year. By knowing Zakat eligibility criteria, it will help you fulfill this important obligation accurately. The need to qualify is based on a variety of factors, including wealth, maturity, and financial security. So in this article, we will describe who is obligated to pay Zakat, its conditions, and how to calculate it. For Muslims looking to perform this sacred obligation, here is how the process works.

What is Zakat?

Zakat is a type of charitable donation that Muslims are required to make once every year. It’s one of Islam’s five pillars, and it purifies your wealth. Zakat is the money that you donate for the needy, sick people, etc. Typically, the zakat is 2.5% of your wealth that you have possessed for a full year.

To share wealth in the community is the purpose of Zakat. It is also a reminder for Muslims to be thankful and charitable.

Who Needs to Pay Zakat?

For an individual to have to pay Zakat, they must fall under certain conditions. Let’s break them down:

Being Muslim

Zakah is only obligatory upon those who are Muslims. Non Muslims are quarterly not liable to pay Zakat.

Reaching Puberty

Zakat is obligatory for Muslims who have attained puberty. Zakat is not compulsory on children.

Owning Wealth Above the Nisab

The Nisab is the minimum threshold level of wealth a serving person must possess for his wealth to be liable for Zakat. A Muslim is obliged to pay Zakat if the value of the property is greater than an Nisab for a lunar year.

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Those who are in a sound state of mind and have financial independence are required to pay Zakat. If they do not have the mental faculties or are financially dependent, they do not need to pay.

What is the Nisab?

Nisab: This is the minimum amount of wealth that one must have before one is obliged to pay zakat. Its value is based off of the value of gold and silver. In calculating the Nisab, 85 grams of gold or 595 grams of silver are used.

If the amount of your wealth is equal to or greater than this amount, you are liable for Zakat. Because the Nisab is tied to the current value of gold and silver, be sure to check current rates.

For example:

If gold is priced at $50 per gram, the Nisab would be approximately $4,250.

If silver is $0.60 per gram, then the Nisab will be approximately $357.

Which Types of Wealth are Subject to Zakat?

Not every wealth is liable for Zakat. The following are included:

Deposit Accounts and Cash Savings

Zakat is also accumulated money in a savings account or at home.

Business Assets

For business owners, Zakat is payable on their net assets, including stock, equipment, and business profits.

Gold and Silver

If you have gold or silver, you must, of course, pay zakat on any gold or silver you own in excess of the Nisab amount.

Investments

Your Zakat calculation also includes stocks, bonds, and other investments.

Agricultural Produce

If you own farmlands and grow crops, Zakat is due on the yield amount if the crop is meant for trade.

On the contrary, zakat doesn’t include personal belongings such as your home, automobile, and apparel.

How to Calculate Zakat

Nisab is the minimum amount of wealth you have to possess before Zakat becomes obligatory; however, if your wealth is above the Nisab, Zakat is always 2.5% of it. Here’s how to calculate it:

• Step 1: Total Your Wealth

Total your savings, gold, silver, investments and business assets.

• Step 2: Subtract Your Debts

That gives you your net worth—if you have debt, simply subtract that from your overall wealth.

• Step 3: Check the Nisab

Ensure your wealth is above the Nisab. If it is, move on to step two.

• Step 4: Calculate 2.5%

After confirming your wealth is above the Nisab, you should find 2.5% of that amount. This is your Zakat.

To exemplify, if your total wealth is $10,000, then your zakat would be 2.5% of $10,000, which is equal to $250.

When Should Zakat Be Paid?

Zakat is due once every year. And you have to pay Zakat once a complete lunar 12-month period has passed since the time your wealth is first considered to have reached the Nisab. While a lot of Muslims prefer to pay Zakat in the month of Ramadan, it can be given at any point of the year.

Who Can Receive Zakat?

So compared to your original concept of giving free food, there are other people after the specific people of Zakat—note that Zakat is only for the people in the Quran. These include:

The Poor (Fuqara)—Those unable to meet their basic needs:

• Miskin: The Needy: Income, but few resources.
• Zakah Collectors: Those who are appointed to collect and distribute Zakah.
• Muallaf: New Muslims who need assistance.
• Captive: Those who are in captivity, who can be freed with Zakat.
• People in Debt : Users who are unable to pay their debts
• Fee SabeelillahIn the Path of Allah: Those working for the cause of Islam.

Travelers Stranded Travelers or Travelers in need

Are You Allowed to Give Zakat to Family?

Family members whom you would otherwise be paying for (parents, children, brothers and sisters) may be given Zakat, but it must be brushed off you. But you cannot pay Zakat to your wife because you are already responsible for her.

Mistakes in Giving Zakat: Common Errors

The common mistakes people do in paying Zakat Here are some common mistakes to watch out for:

Not Calculating Correctly

Zakat is calculated on all your wealth after deducting debts before others.

Paying Late

Don’t delay paying Zakat. So do remember to pay that on time every year.

Paying on Non-Eligible Items

Things such as your vehicle, your home, etc., are not considered Zakat.

How to Pay Zakat?

Types of Zakat There are many types of Zakat that can be given:

Directly to the Needy

You are allowed to pay Zakat directly to a poor person.

Through Zakat Organizations

You may also pay Zakat through organizations such as sparbd.org, which will make sure your donation goes to the right people.

Online Payment

There are many platforms that allow you to pay the Zakat online for convenience purposes.

Final Thoughts: Zakat eligibility criteria

These five questions every Muslim must understand the criteria for Zakat eligibility. It makes sure that you perform your religious obligation properly. The calculation of Zakat should be accurate, paid on time, and distributed to the deserving, as Zakat is not just a religious responsibility but rather a tool to establish a more connected society. Do not forget, Zakat makes your wealth clean and takes you nearer to Allah.