How to Calculate Zakat in Canada?
Zakat is the third pillar of Islam. It forms a fundamental practice of the Islamic faith that demands a practical demonstration of faith from believers. Islam discourages hoarding money and, through Zakat, encourages believers to give a small percentage of their wealth to deserving individuals. Learning and practicing Islam require an attitude of keen attention to detail. Learning about Zakat in detail should be every Muslim’s priority because it is not only a means of achieving eternal salvation but also a powerful tool of social change. In this article, we will learn the significance of Zakat in Islam and how to calculate Zakat in Canada.
According to the UN, Zakat closely aligns with the Sustainable Development Goals (SDGs) and has the potential to transform millions of lives. A 2016 study estimated that the annual Zakat pool lies between USD 200 billion and USD 1 trillion. That is a large amount that can bring about many positive changes to our world.
The Meaning of Zakat:
Before learning how to calculate Zakat in Canada, let’s discuss its meaning and purpose.
Zakat is an Arabic word meaning purification. By giving Zakat, a believer practically prioritizes Allah’s (SWT) will over their own love for money and power. Islam makes it abundantly clear to believers that they must focus on investing in the afterlife.
The matters of the mortal world are transient, fleeting, and the roles ascribed to us are temporary. Zakat allows believers to practise detachment from the material world and to keep a check on their human tendency to greed.
Narrated Mujahid: `Abdullah bin `Umar said, “Allah’s Messenger (ﷺ) took hold of my shoulder and said, ‘Be in this world as if you were a stranger or a traveler.” The sub-narrator added: Ibn `Umar used to say, “If you survive till the evening, do not expect to be alive in the morning, and if you survive till the morning, do not expect to be alive in the evening, and take from your health for your sickness, and (take) from your life for your death.” (Sahih al-Bukhari, 6416)
When Does Zakat Become Obligatory?
Zakat is an annual giving. We must adhere to its timeline as strictly as possible. Since Islam recommends a lunar calendar, the length of its year may vary. We must be cautious about that and give Zakat exactly after the first anniversary of our Zakat.
The circle will continue till we remain eligible to pay Zakat till the end of our lives.
Giving Zakat in Ramadan:
Many believers prefer giving Zakat during Ramadan because of the observance of Laylatul Qadr and its great religious and cultural significance. However, it may not always be ideal, as one of Zakat’s functions is to help needy people. Their needs should be met throughout the year, not just at a specific time.
However, if someone wants to give Zakat during Ramadan, they must adjust their giving circle by paying Zakat in advance for the coming year. Thus, delaying your Zakat payment is not recommended.
Zakat’s Eligibility & the Nisab Threshold
Zakat eligibility is primarily determined by Nisab. Adult, sane believers who have wealth equal to or greater than the Nisab value must pay Zakat. The Nisab value is traditionally determined with a gold or silver threshold. Any Muslim possessing wealth equal to or greater than 87.48 grams (approximately 3 ounces) of gold or 612.36 grams (almost 21 ounces) of silver must pay Zakat.
Most scholars prefer the silver equivalent Nisab value, which slightly lowers the Nisab threshold. It represents a prudent approach because paying Zakat is a great privilege and an opportunity to make an impact on the world. The Prophet (ﷺ) said:
“The upper hand is better than the lower one, the upper being the one which bestows and the lower one which begs.” (Sahih Muslim, 1033)
How to Calculate Zakat in Canada?
Calculating Zakat is simple. The process is the same no matter where one lives. However, the prevailing gold and silver rates in the local markets matter. First, determine whether you are eligible to pay Zakat. If you possess 612.36 grams of silver, you must pay Zakat. Based on that, an estimated Nisab value in Canadian dollars is approximately $949.15.
However, we must take into account the current market price of silver in Canada, which may fluctuate. Calculate the current value to get the exact Nisab threshold.
If you possess wealth equal to or greater than the Nisab, you must immediately pay Zakat.
The Zakat obligation is 2.5% of one’s surplus assets after debts are deducted.
However, Zakat doesn’t apply to private possessions such as your clothes, car, house, and items of personal usage. But items held beyond fundamental needs may be subject to Zakat.
Zakat applies to various forms of wealth, such as gold, silver, stocks, and investments. Note that you must also give Zakat on gold and silver jewelry.
Who Should We Pay Zakat To?
Zakat cannot just be paid to anyone. The Quran clearly states the categories of people who are eligible to receive it. According to which, Zakat should only be paid to Muslims belonging to the following categories of people:
Al-Fuqara: People having little or no income.
Al-Masakin: People with insufficient or insignificant income.
Al-‘Amilina ‘Alayha: Zakat collectors.
Al-Mu’allafati Qulubuhum: For those who are inclined towards Islam.
Fir-Riqab: Captives needing money to be released.
Al-Gharimin: People in debt.
Fi Sabilillah: People striving in the cause of Islam.
Ibn As-Sabil: Travelers needing support.
However, you must also note that these are general categorizations, and there are various other subtleties involved that may require guidance from learned Islamic scholars.
Your Zakat Contributions Matter
The Ethics of Paying Zakat:
It is traditional to pay Zakat discreetly. The purpose of Zakat is not to be pompous about one’s possessions, but only to please Allah(SWT). Zakat is an opportunity to practise piety. It is an obligation decreed by Allah (SWT) and not some favor we lend to others.
Zakat is the right of those in need. Therefore, we must give them due respect and give Zakat without making it a tool of self-aggrandization. Thus, if you are giving Zakat to someone in need, make sure that you maintain their privacy.
Why Donate Your Zakat to Transparent Hands?
Since our inception in 2014, we have been concentrating on providing relief to needy Pakistani patients by supporting surgeries and medical treatment. Note that more than half of Pakistan’s population lacks access to healthcare facilities. That severely limits the potential of the Pakistani population. We are motivated to provide relief to as many Pakistanis as we can reach.
Transparent Hands supports a range of surgeries, including gynecological, ENT, urological, cochlear implant, obstetric, orthopedic, oncologic, and general surgeries. Mother and Child health is one of our specialized areas.
We also organize medical camps in low-income and remote areas to facilitate needy patients. Our medical camps are managed by expert administrators, professional doctors, paramedical staff, and passionate volunteers. These camps offer free medical checkups, medicines, and diagnostics.
We leave no stone unturned to ensure compliance with the Shariah rules. Not only are we Shari’ah-compliant, but we work under the guidance of an experienced and learned Islamic scholar, who leads us every step of the way.
Now that you know how to calculate Zakat in Canada, you can donate that amount to Transparent Hands via our informative, easy-to-access website. Click here to donate to us now!
Your Zakat, Sadaqah, and other donations will help us save and revive lives.
Read More: 10 Crowdfunding Platforms for Canadians
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