Zakat isthe Third PillarofIslam and an obligatory actof devotion which must be fulfilledannually. The use of Zakat is to purify your own wealthby removing greed,and redistributed wealth from the rich to the poor.When you donateZakatyou’reaccomplishingyour Islamicduty, butalso helpingthe vulnerable people around the world. Community Lighthouse Foundation have put togethera simple guideto walk you through how to calculate Zakat,also providing you with our online Zakat calculator forease and accuracy.
The word Zakatoriginates from the Arabic language, which means to purify,cleanse, or grow.It purifiesourwealth,andreminds us of our responsibility tohelpothers.
The rule is thatif a person’s wealthexceeds a certain threshold (known as theNisab), andithas beenretainedforfulllunar year,then 2.5% of that wealth must be given as Zakat.
“Establishprayer, andpay alms-tax. Whatever good you send forth for yourselves, you will˹certainly˺find˹its reward˺with Allah. Surely Allah is All-Seeing of what you do.” [Quran 2:110]
AtCommunity Lighthouse Foundation,weoperatewith a100% Donation Policy,sothatallyour contributions godirectly to help those in need.
To work out your zakat, first ask: what do you have to pay zakat on? You must include wealth thatyou’veowned for a full lunar year (known as a “Hawl”) and which meets or exceeds theNisab. That may include savings, gold and silver, investment assets, and some types of property. Debts you owe may reduce the amount you pay. Using the CLF Charity zakat calculator can simplify this by helping you list your assets and apply the rules correctly.
When figuring out how to calculate zakat on cash, consider all your money: in your bank accounts, savings, digital wallets, and even cash held physically at home. Add up the total thatyou’veheld for one lunar year. From that, subtract any short-term debts you owe. If the remaining amount is above theNisab, multiply it by 2.5% (that’s the standard rate) to find your zakat amount.
For example, ifyou’vesaved £10,000 and have no relevant debts, your zakat would be £10,000 × 0.025 = £250. Using CLF Charity’s online zakat calculator can help you do this automatically.
Many people ask how to calculate zakat on gold. With gold (jewellery,coinsor bars), you firstdeterminethe total weight and then the current market value of that gold. Multiply the weight by the value per unit (e.g., grams or ounces) to find its total monetary value. Then apply 2.5% to that figure.
Some scholars differentiate between gold you wear versus gold you hold purely as an investment, but many choose to include all gold to remain sure. Ifyou’reunsure, use a calculator or ask a trusted scholar. Our CLF Charity zakat calculator includes a section for gold to help you plug in the weights and values and get a result you can trust.
A common questionmany askishow to calculate zakat on salary.It’simportant to note that Zakat is not dueeach monthon the salary that comes through. It becomes due on the savingsyou’vemade from the salary thatyou’veheld for a full lunar year.Ifyou’vesaved thisportionof salaryand the savings you have made reach theNisab, then you must pay 2.5% of it when the yearcomes to an end.
Many choose to pay their Zakatin Ramadan as it makes it easier to remember their fixed date each year when their Zakat is due.
Many question how to calculate zakat on property. The type of property and howit’sused makesa differencewhen it comes toincluding it into your Zakat payment. If you live inthe property,youdon’tpayzakat on its value. If you own a propertywhichyouarerentingout(and have been for a year), youmustpay zakat on the rental incomethat comes from itrather than on the whole market value of the house. If the property was bought to sell forprofitthen youare required topay Zakat on its market value each year.
Again, the CommunityLighthouseFoundation zakat calculator will helpyou work outtherental income or investment property value so that you canassess whether Zakat is due on it and if so, how much.
For thosethat invest in shares and stock will want to know how to calculate zakat on stocks.Manyscholarsbelieve that you must pay Zakat on the total market value of theshares youplan to sell.If you holdshares for a long timeand receiveextrafrom it, you pay zakat on the dividends andon theshare valueif you eventuallyintend to sell.
Sometimes this area can becomea littlecomplexand soit’sbest to also consult a qualified advisor when it comes to paying Zakat onstocks.
One of the moreintricate and detailedareas isaround how to calculate zakat on pension fund. The answerto this woulddepend on your access to the funding. If your pension fund isavailable for withdrawalnow then you should include it into your Zakat calculation, however, if itremainslocked until retirement then manyscholarsadvicethat Zakat on it becomes due upon receiving it and not before.
We wouldrecommendyou check your pension terms and using our Zakat calculatorto estimate the amount due when it becomes eligible to ensure you of your duty fulfilment.
One of the easiest andaccurateways to manage your Zakat payment is to use a Zakat calculator.This would guide you through each type of wealth, be it cash, gold, or property. Using the Zakat calculator will also help apply theaccuratepercentage and thresholds.
You must remember that paying Zakat is more than just arequirement, it is a promise to Allah and an opportunity for yourself and others. It gives you the chance to purify your wealth, support the struggling communities, and provide help to those who really need it.
We hope that through using our Zakat Calculator and following the guidelines aboveyoucanwork outhow much Zakat is due upon you.If,however,you stillfeel unsure and have more of a complex financial situation, thenit’salways best to speak to an Islamic financial advisor who can guide you throughyour uncertainty.
When you give through Community Lighthouse Foundation, your contribution reaches the vulnerable with transparency through our 100% donation policy.Remember, your Zakat counts, not just as a duty, but as a gift of hope to the ones that need it most. Donate your Zakat to Community Lighthouse Foundation now.
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