*This blog is predominantly based on Hanafi Fiqh
From learning how to value your gold, to making sure you’re paying Zakat on all necessary assets, here is everything you need to know about paying your Zakat this year.
1. Check the latest value of your gold and silver
You need to pay Zakat on any gold over 87.48 grams and any silver over 612.36 grams. Most people pay their Zakat in cash, so knowing the price of gold and silver per gram is essential. It is also important to get your assets re-valued as the price of gold keeps fluctuating. You can value your gold/silver in two ways:
- Contact your local jeweler and get a precise figure according to the value of scrap gold.
- Find the universal price for gold and silver online and use our Zakat Calculator to work out the value of your assets. Simply multiply the current price of gold per gram by the total weight of your gold.
Example: Fatima has 100 grams of gold. The value of gold is R816.00 per gram. This means Fatima has R816,000 worth of gold.
2. Check the latest Nisab value to calculate correctly
Nisab refers to the minimum amount of wealth you need to have to qualify to pay Zakat. The figure for Nisab fluctuates every year because it is based on the value of gold and silver.
You can check the latest Nisab values on our online Zakat Calculator.
According to Shariah, silver Nisab should be used to calculate how much Zakat to pay on cash, property, investments, and businesses, as well as any silver jewelry you own. This is because more people will qualify to pay Zakat with silver Nisaab and this consequently results in more poor and needy people benefitting.
3. Be aware of paying Zakat on precious metals that are encrusted with gold
If you own precious metals like platinum/diamond, and they have gold encrusted in them, then Zakat will be due upon those metals on condition that the gold is more than the metal. In this case, one needs to pay Zakat on the amount of gold that is in the metal.
4. Be aware of paying Zakat on all eligible assets.
When calculating Zakat, remember to include these assets:
Pensions: Zakat must be paid on the amount of your pension that you have contributed (voluntary contributions) within the year, but not on the portion paid by your employer.
Shares: If you don’t intend to sell the shares, then Zakat is due on dividends you earn from them. However, if you are buying and selling shares, then Zakat is only due on their current market value.
Property: Any property other than your home must be considered for Zakat. If you are in the business of buying and selling properties, Zakat is due on the current resale value of these properties. If you are in the business of letting properties, then Zakat is due on savings made from the rental income only.
Loans: If you have lent anyone money and believe the debt can be recovered on demand, then you need to pay Zakat on it this year. However, if you have doubts about recovering the debt, you don’t need to pay Zakat on it until you actually receive the money. At that point, you will also need to pay Zakat for all the previous years when the debt was outstanding.
5. Keep record of when you paid your Zakat
Zakat is due on your wealth annually, but most people prefer not to pay one lump sum at the end of the year. Rather, they give Zakat during the course of the year. For example:
- Donating towards a cause or emergency appeal
- During sacred days to gain extra rewards - for example, in the last ten nights of Ramadan.
- In monthly installments, to make the payments more
It is fine to pay Zakat at different times in the year but just remember to keep a record of every time you give Zakat. This way, you can calculate whether you paid the correct Zakat at the end of the year.
6. Use the Muslim Hands Zakat resources
Alhamdulillah, Muslim Hands has been administering Zakat for over 15 years and we take the responsibility you bestow upon us very seriously.
We have some great resources to help you calculate your Zakat correctly as this is an important obligation, often mentioned in the same ayah as Salah in the Quran.
We pray Allah SWT accept our acts of charity during the month of Ramadan, and shower His endless mercy and blessings upon us, Ameen.