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Zakah

Charity is an act common to all divinely revealed religions. Even people with no religion at all recognize generosity as an admirable quality. The desire to possess is a natural, inborn urge. It is not in itself a bad thing. It is the basis of self-preservation. It leads parents to provide homes, food, clothing and other needs for their children. It also leads people to provide goods and services for each other. But the urge to possess needs to be controlled and balanced with generosity; otherwise it becomes dangerous. Prophet Muhammad (pbuh) pointed out this tendency when he said, “If a descendant of Adam possessed a valley of gold, he would crave another one. And nothing will fill his mouth but the dust [of the grave]. But God will accept the penance of one who repents.”¹ Generosity requires a struggle against the inborn tendency to be selfish. To provide the setting where generosity can be exercised, God created some people poor and some people rich. Not only that, but He takes some people from lavish wealth to grinding poverty and vice-versa. The realization that even if you have money now, you may lose it all at any moment is a great leverage by which Satan influences people to be stingy. The Qur’an says,
“Satan threatens you with poverty and enjoins you with lewdness.”²

    God, on the other hand, has promised that wealth will never be decreased by charity. “Whatever you spend [for good] He replaces it, and He is the best of Providers.”³

    One who gives charity affirms his faith in God’s promise. That is why charity is called sadaqah in Arabic. It is related to the word for ‘truthfulness’ and the word for ‘belief.’

    The Islamic concept of charity is based on the Islamic concept of wealth. Wealth is considered a trust placed in one’s hands by God. A person who believes he owns more money than another because he is smarter or worked harder than him has a deficient understanding. How many people are hard working and smart yet poor? And how many people of mediocre ability and energy are rich? God is the ultimate provider of wealth and he is its actual owner. Prophet Muhammad observed, “The son of Adam claims, ‘My wealth, my wealth.’ But, O son of Adam, was any of your property really yours, except what you consumed and destroyed, or wore until it wore out, or gave as charity and sent ahead [for yourself]?”⁴

    Because wealth ultimately belongs to God, its temporary possessor does not have a blanket right to do whatever he or she wants with it. It is unlawful to waste wealth. It is also unlawful to use wealth to buy substances prohibited in Islam. Also, the poor have a due right on a portion of the wealth placed in one’s possession. Giving them their due right is not doing them a favor, because that portion of one’s wealth is actually for them. A person who doesn’t give it has, in reality, confiscated something that does not belong to him.

    Zakaah is an obligatory form of charity on savings. It is not an income tax, but a savings tax. Its major recipients are the working poor, who cannot meet all of their needs without some additional help, and the destitute, who cannot even meet their basic needs. It is also used to pay off the debts of those who are unable to pay off their own debts, to free slaves and ransom prisoners of war and to reconcile the hearts of new Muslims who may not yet have a firm foundation of faith. Other lawful recipients are stranded travelers, those engaged in jihad and employees of the state working to collect and distribute zakaah. Their wages come from it.

   Zakaah is due on the following forms of wealth:

      Gold and silver (this includes paper money)

The amount due is 2.5% of savings when it reaches the equivalent value of 85 grams (approximately three ounces) of gold. This minimum amount on which zakaah is due is called the nisaab. Although some scholars say that money should be pegged to the nisaab of silver, i.e., 595 grams, the majority considers gold to be a more reasonable peg for developed economies. Consider the difference in value between the two nisaabs: If gold is worth $300 per ounce, the nisaab is equal to $900. If silver is worth $8 an ounce, the nisaab is equal to approximately $167. In most cities of the Western world, $167 would not be enough to rent a room for a month, much less an apartment. The principle behind zakaah is that the rich should pay it to the poor. A person with only $167 in savings would be more likely to need zakaah than be in a position to pay it. Zakaah is due on savings of gold and silver one year after the nisaab has been reached.

      Business inventory

This includes all goods acquired or held with the intent of selling them. It would include store merchandise, land bought for resale, stocks bought for resale, etc. Zakaah is not due on factories, machinery being used to produce goods, or property being held for rental income. However, zakaah would be due on the income generated by such properties if it is saved for a year. The retail value of business inventory is calculated then added to the savings of gold, silver, and currency. 2.5% of the total is due.

      Livestock

Such as cows, sheep and camels. There is a different nisaab for each type of animal and a rather detailed and complicated table of how much is due for different amounts of each type. Any fiqh book can be consulted for the details. Fiqh as-Sunnah is one of the better books available in English.

      Agricultural produce

The nisaab is five wasqs, which is equivalent to 825 liters. 10% of the harvest is due if the land is watered by rainfall. 5% is due on land irrigated by wells, canals or mechanical systems.

      Buried treasure

According to some scholars, this applies to all mineral wealth extracted from land. This is more relevant than the explanation that it refers only to valuables buried by non-Muslims before Islam. One-fifth is due as zakaah.