Zakat calculator 2023: Who pays and how is it calculated?

Dubai: As the month of Ramadan draws to a close, many Muslims across the world may be trying to calculate the amount of Zakat – a form of obligatory charity or almsgiving in Islam – they are supposed to be paying. But what exactly is Zakat? Who is obligated to pay it? And how is it calculated?

Gulf News spoke with Dr Mohammed Eyada Alkobaisi, Grand Mufti, Islamic Affairs and Charitable Activities Department in Dubai, who provided a detailed breakdown of this form of charity.

Who is required to give Zakat?

There are two types of Zakat in Islam – Zakat-Al-Maal, which is the Zakat on a person’s wealth, and Zakat-Al-Fitr, which is specifically linked to Ramadan. While Zakat-Al-Maal varies, based on a person’s wealth, the amount for Zakat-Al-Fitr is specific, with every Muslim required to give the minimal amount before Eid Al Fitr, which marks the end of Ramadan.

For Zakat-Al-Maal, however, you would need to have a minimum amount of wealth, upon which Zakat is obligatory. This amount is called ‘Nisaab’.

“The Nisaab for money was set by Prophet Mohammed [PBUH] at the value of 85g of 24 carat gold, which is about Dh20,723 nowadays,” Dr Alkobaisi said.

So, if a Muslim’s overall wealth is Dh20,723 and above, they would be obligated to pay Zakat.

When do I need to pay Zakat?

Zakat is due once every Hijri year, which is shorter than the solar calendar. According to Dr Alkobaisi, it becomes due one Hijri year after a person’s wealth reaches the Nisaab.

“The day the money and savings of a person reach the Nisaab, that will be his or her Zakat due date, and he or she has to pay Zakat after one Hijri year, on the same date,” he said.

So, if your overall wealth reached the Nisaab on the 10th day of Ramadan, that is the date when the Zakat would be due next year. It would be due again on the 10th day of Ramadan every following year.

How is Zakat calculated?

Zakat is calculated differently depending on the form of earnings. Here is how you calculate the Zakat based on your salary, gold jewellery as well as any property you may own:

Zakat on my salary or bank savings

The calculation for Zakat is not based on one’s salary amount. Rather, it looks at the amount of money you have with you on the Zakat due date.

“Zakat is not linked with the deposited salaries, but with amount of money that was not spent. All the money that has already been spent throughout the year is not included in the calculation of Zakat,” Dr Alkobaisi said.

“When the Zakat due date comes, the person has to give Zakat on all the money that is still with him or her on that day, including the money recently received,” he added.

This is the easiest way to calculate due Zakat, as you will have a single Zakat due date every year.

“It is also permissible to note down a separate date for each new money that you receive, and then give Zakat on that money a year later, but this is more difficult for most people, and in this way, you will have many due dates for Zakat every year,” Dr Alkobaisi said.

Zakat is not linked with the deposited salaries, but with amount of money that was not spent. All the money that has already been spent throughout the year is not included in the calculation of Zakat.

- Dr Mohammed Eyada Alkobaisi, Grand Mufti, Islamic Affairs and Charitable Activities Department in Dubai

Zakat calculator

The amount of Zakat due on money is 2.5 per cent, every Hijri year.

“The easiest way to calculate that percentage is to take the amount you have with you and divide that by 40, and the result will be the total Zakat to be given to the deserving people such as the poor and needy,” Dr Alkobaisi said.

For example, if a person has Dh46,000 on the Zakat due date, then the Zakat to be paid is Dh1,150 (Dh46,000 ÷ 40 = Dh1,150).

How to calculate Zakat on gold?

How much gold should I be in possession of, for Zakat to be paid on it? Is it based on weight or value? Dr Alkobaisi said that for the Zakat on gold, there was a difference of opinion among Islamic scholars.

“If the gold of a woman is her personal jewellery and it is in normal quantities like her peers, then there is no Zakat on that jewellery, according to the majority of scholars. If the gold is her personal jewellery but it is more than a normal quantity for her, then it is better to pay Zakat on the amount above the normal use, as some scholars mention that. The normal quantity of gold for a woman differs according to different societies, and social and financial status of the woman and her husband or family,” Dr Alkobaisi said.

“Scholar Imam Abu Hanifa stated that a woman has to pay Zakat for gold if it reaches or exceeds 85g, even if it is her personal jewellery. This is a strong and more careful opinion,” he said.

As for paying the Zakat on that jewellery, the easiest way to calculate is to consider the current value of all that gold, and give 2.5 per cent of it as Zakat, according to Dr Alkobaisi.

If the gold jewellery contains precious stones, then their weight can be deducted first, as there is no Zakat on precious stones.

“She can give Zakat from the gold itself, or from money, or sell some of the gold and pay the due Zakat,” he added.

If I own property, how should I calculate zakat?

Owning property does not necessarily make Zakat obligatory on a person. The eligibility, in fact, depends on how the property is being used, according to Dr Alkobaisi.

“If the property is for personal use, then there is no Zakat on that property. If the property is for rental purposes, then there is no Zakat on the value of that property, but there is Zakat on the rental income, if it reaches the Nisaab of Zakat by itself, or with the other money that the person has. Any part of the rental income that is spent within the year is not included in the calculation of Zakat, such as money spent on maintenance, payment of debt, or expenses.

“On the other hand, Zakat needs to be paid on property for real estate trading, and the due Zakat is 2.5 per cent. The calculation is done according to the market value of that property on the Zakat due date.”

I have taken a heavy loan. Do I still need to pay Zakat?

What happens in case a person has a loan that he or she needs to pay off? Does the debt affect their Nisaab or overall wealth calculation, which is necessary to pay Zakat?

According to Dr Alkobaisi, there is a difference of opinion among Islamic scholars regarding Zakat on a person in debt, and the topic is quite detailed. However, he summarised the conclusions of the major schools of thought in Islam.

“The Shafie school of jurisprudence opine that being in debt does not negate Zakat and the debt is not deducted from the Zakat, whether the debt is due, delayed or in installments. The Maliki scholars opine that the debt is deducted from the Zakat only if there was no cover for the debt from other extra assets or personal belongings.

“Some scholars opine that the debt is to be deducted from the Zakat. However, most scholars who allow the debt amount to be deducted from the Zakat put a condition that the person should not have any other money to pay off that debt. If a person has other money beyond his basic needs, such as extra cars, houses, lands or furniture beyond the basic needs, then he should put the value of this extra money against the debt, and then give zakat on the remaining amount. If the extra assets or personal belongings beyond basic needs do not cover up the whole debt, then the amount that they do not cover is deducted from the Zakat, and then they should give zakat on all the remaining amount,” he said.

Is it a long-term loan?

Another factor to consider is whether you have a short-term loan or a long-term loan.

“For long-term debts that are more than a year, you may deduct the current debt that is due for payment before the Zakat due date, and then give the Zakat for the remaining money and possessions with you, if it reaches the Nisaab. It seems that the Shafie opinion is more appropriate, as the future debt is not due yet. Thus, the money with you is still your money and you can do with it whatever you want. Moreover, most long-term debts are guaranteed by salaries or mortgaged by other possessions, and these debts are generally insured and waived in case of death or disability. Accordingly, you need to pay Zakat on all the money you have with you on the zakat due date, excluding unpaid due installments of the loan, if any,” he said.

Need help calculating your Zakat? Call this number for help

While Zakat on gold, monetary savings or property may be the most common calculations people need to make, there are other categories of Zakat, like Zakat on market shares, livestock, crops and fruits or precious minerals and ores.

“We would like to direct readers to contact our Fatwa service on our toll-free number 800 600, which is provided all days of the week during working hours and after hours,” Dr Alkobaisi said.

The UAE Zakat Fund – an online Zakat calculator

The UAE also has a Zakat Fund, which was established by Sheikh Zayed bin Sultan Al Nahyan, Founding Father of the UAE.

The Fund’s website provides an online Zakat calculator, which helps you calculate the Zakat you need to pay on your money, gold, silver and other forms of wealth. To access the calculator, visit: https://www.zakatfund.gov.ae/zfp/web/calculation/calculatemyzakat.aspx

More recently, they also started a Whatsapp service, that allows people to calculate the Zakat that is due and pay it instantly.

Who can receive Zakat?

According to Dr Alkobaisi, the distribution of Zakat, too, has specific guidelines that need to be met, as based on Chapter 9, Verse 60 in the Quran.

“Verily, Alms are for the poor and the needy, and those employed to administer the (funds); for those whose hearts have been (recently) reconciled (to Truth); for those in bondage; and those in debt; and in the cause of Allah; and for the wayfarer: (thus is it) ordained by Allah, and Allah is full of knowledge and wisdom” – Quran, Chapter 9, Verse 60.

Dr Al Kobaisi said that this was further emphasised by Prophet Mohammed [PBUH] when a person came asking for charity from Zakat, and the Messenger [PBUH] explained to him by saying: “Verily, Allah did not accept the ruling of a Prophet or another in Sadaqah [Zakat], till He Himself ruled it, and made it eight parts. If you are one of these eight parts, I will give you. [Reported in the Hadith collection of Abu Dawood].

“That is why, it is not permissible to give from Zakat to any other groups or uses, except one of these eight categories,” Dr Alkobaisi said.

Where and how can I pay Zakat?

Various registered charities in the UAE offer people the chance to donate their Zakat money through kiosks at malls, at their office locations, through text messages, bank transfers or online payment through cards.

“If you do not know deserving people, then you should give the amount to the authorised charity organisations in your locality, under their Zakat account, and they will give it to deserving people on your behalf,” Dr Alkobaisi said.

These are the registered charities in the UAE, where you can pay Zakat money online:

UAE Zakat Fund
800 8222
Pay online: https://www.zakatfund.gov.ae/ZFP/web/servicescard/serviceslist.aspx?secid=15
Pay through Whatsapp: +9718008222

Islamic Affairs and Charitable Activities Department (IACAD)
800 600
Email: mail@iacad.gov.ae
Website: www.iacad.gov.ae
Pay online: https://www.ecp.ae/English/Pages/Donate.aspx

Emirates Red Crescent Authority
800 733
Email: hilal@rcuae.ae
Website: www.rcuae.ae
Pay online: Visit https://www.emiratesrc.ae/en/donate.aspx and select the option for paying Zakat

Dar Al Ber Society
800 79
Whatsapp: 052 6155550
Pay online: www.daralber.ae

Beit Al Khair Society
800 22554
Email: info@beitalkhair.org
Pay online: beitalkhair.org

Human Appeal International
800 5 666
Pay online: https://www.ico.org.ae/en/donate

Pay Zakat through Dubai Now
You can also pay your Zakat amount through the Dubai Now app, by selecting the ‘Donations’ service.

Zakat-Al-Fitr – ‘the largest collective charity in the world’

Apart from Zakat-Al-Maal, which is the Zakat on a person’s wealth, there is also Zakat-Al-Fitr, which is specifically linked to Ramadan.

“Zakat-Al-Fitr is to be given out at the end of Ramadan, on behalf of every Muslim, young and old. Basically, it has to be given out from storable staple food, such as rice or grains, and some scholars allow it to be given out as money, which comes to about Dh25 per person these days, making it the largest collective charity in the world, as billions has to be given out in charity in the span of a day or two, leaving no person needy on the day of Eid,” Dr Alkobaisi said.

How Zakat is different from other forms of charity

While Zakat has specific calculations and requirements for who it can be paid to, there is no specific restriction when it comes to general acts of charity and kindness – called Sadaqah in Islam.

“It is not restricted to giving money, and any beneficial help or support to all human beings is in fact a charity,” Dr Alkobaisi said.

While Zakat is only obligated on those who are in a certain position of wealth, Sadaqah, in fact, is essential for every Muslim to give, according to Dr Alkobaisi.