How to Calculate Zakat on Revenue
For Muslims around the world, the month of Ramadan is a time of deep reflection, sacrifice, and joyous family gatherings. It’s also a time when Muslims give more Zakat than at any time of the year. Zakat spiritually purifies wealth for the givers and provides necessary assistance to the poor. It is also a powerful source of good, with untapped potential to contribute to sustainable development in communities. According to a reserch, the potential Zakat pool can be somewhere between US$200 billion and US$1 trillion.
Is Zakat Compulsory?
Zakat is a compulsory, systematic giving requirement for the rich in Islam. It is so important that it is often referred to as the third pillar of Islam. It is one of the most practical forms of worship that demands that believers detach from their love of money and power and prove their dedication to Allah (SWT).
Zakat should be paid on revenue from salaries and professional income. Zakat on revenue includes the following categories: Salary, Arrears of pay, various allowances (car, meals, and meetings), others including bonus or something that can be counted as income such as royalties, rent and other.
Word of the Almighty says: “O ye who believe! Spend (in Zakat) out of the work you are good, and part of what we remove from the earth for you. And do not deliberately choose the worst of it (and you spend, or not make the provision of Zakat ) when ye would never take the bad (if you have been given), except with closed eyes. And know that Allah is Rich, the Praised.”
Zakat cannot be paid from wealth that has been gained by illegal means.. To pay Zakat, it is also important that you have full ownership of your wealth and that you are independent. It is also important to make sure that your income source is legal, otherwise, there are no spiritual benefits of paying Zakat at all.
How to Calculate Zakat?
If your income exceeds the nisaab amount, which is 2.5% of your total gross income per year, then you can pay Zakat. You may deduct the basic expenses and then pay your Zakat on whatever surpass amount you have in hand.
As discussed previously, Zakat is a form of worship, so it is important that we pay it according to the Sharia’h law or as recommended in the Holy Quran. Verse no 130 in chapter Taubah, reads: “Take from their wealth charity (alms) to purify them and cleanse them thereby, and pray for them.” Again Verse 92 from Al Imran states: “Never shall you attain pity unless you spend (in the way of Allah) out of what you love.”
Prophet Mohammed (PBUH) said: “Until four questions have been asked to, no one will be allowed to move on the Day of Resurrection. Two of these questions are: How did you earn, and how did you spend?” The Holy Quran guarantees that the Zakat giver will prosper in Verses (31:4‑5) which states: “Those who establish regular prayers and pay regular (Zakah) are the ones who will prosper.”
When to Give Zakat & to Whom?
All Muslims are eligible to pay Zakat, which is at least 2.5% of their accumulated wealth for the benefit of the poor, destitute, and others. It is one of the largest forms of wealth transferred to the poor. To seek the blessings of the Almighty, Zakat must be given annually. In doing so, don’t forget to follow the lunar Islamic calendar rather than the Gregorian calendar. Also, keep in mind that Zakat becomes obligatory, right from the day you exceed the Nisab threshold. Your Zakat paying cycle starts from that point and continues thereafter, unless your savings fail to cross the Nisab threshold.
While giving your Zakat, don’t forget to donate to Transparent Hands. With your Zakat, Sadaqah, and other donations, we have helped out thousands of needy patients in Pakistan, giving them a second chance at life.
Donate to Transparent Hands now!
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