A Simple Guide for Missed Zakat

How to Calculate and Pay Missed Zakat 

Zakat is often referred to as the ‘forgotten pillar’ due to a widespread lack of knowledge and understanding within the Muslim community. Consequently, it is possible that you may have miscalculated your Zakat in the past, resulting in paying less than required. 

There may even be years where you missed paying Zakat altogether because you were unaware of the obligation or perhaps neglected to keep your records up to date. Whatever the reason, miscalculating or missing Zakat from previous years, whether intentional or unintentional, remains a debt that must be paid without delay. 

Failure to settle this debt risks destroying your own wealth, as highlighted in the following Hadith: 

Moreover, Zakat is a right of the poor. Withholding it not only increases poverty in society but also carries severe consequences for the individual: 

Common Reasons for Missed Zakat 

You or your business may have miscalculated or missed Zakat if: 

• You were unaware of the importance of Zakat (the ‘Forgotten Pillar’). 
• You were not a ‘practising’ Muslim at the time. 
• You lacked sufficient knowledge and calculated incorrectly. 
• As a teenager, you had enough money to warrant Zakat but didn't think about it. 
• As a student, you incorrectly assumed a student loan exempts you from Zakat. 
• You were unsure about paying Zakat on jewellery. 
• You failed to distinguish between personal and business assets. 
• You were confused about Zakat on superannuation or other benefits. 
• You did not understand the business rules for calculation. 

Zakat for Deceased Loved Ones or Lost Funds 

• Deceased Family Members: If a person passes away with unpaid Zakat, it must be paid from their estate before inheritance is divided. If the inheritance has already been distributed, the debt remains with the inheritors. 
• Lost Zakat: If Zakat is lost before it reaches a recipient, it remains a debt and must be paid again. 

Your Guide to Calculating Missed Zakat 

Zakat is an individual obligation. It should be calculated separately for every family member, including husbands and wives. 

1. Identify the Subject 

Is the calculation for yourself, your business, or a deceased family member? The same approach applies to all, but each must be calculated separately. If your children or family members have missed Zakat, take this opportunity to advise them. 

Think of this as correcting a vital obligation to Allah. Just as you would rectify outstanding tax obligations with authorities to avoid penalties, you should settle your Zakat before the Day of Judgement. 

2. Determine the Number of Years 

Be honest and aim for accuracy. If you are unsure, work backwards. 

• Individuals: Count the years from the age of puberty to the first year you started paying. (e.g., If you are 30 and first paid this year, you may owe for 17 years - from age 13 to 29). 
• Businesses: Count from the start of the business. (e.g., A 10 year old business that has never paid Zakat owes for the previous 9 years). 

3. Gather Information and Estimate 

If you have accurate records (especially for jewellery and investments), use them. Remember to include assets for children who were under the age of puberty for the years you are calculating. 

The Estimation Method: If you lack accurate records, scholars recommend using your best estimation: 

1. Take the amount from your "best" year (highest savings). 
2. Take the amount from your "worst" year (lowest savings). 
3. Use the middle (average) amount to calculate the 2.5% for the missed years. 

Example: * Calculating cash savings for 10 missed years. 

• Best year: $5,000. Worst year: $0. 
• Middle amount: $2,500. 
• Calculation: 2.5% of $2,500 = $62.50 per year. 

Apply this same method to all Zakaatable assets, including shares, property, gold, and silver. 

Ready to calculate and pay your Zakat?

Use our online resources to calculate and pay your Zakat today: 

• Zakat Calculator – Click Here 
• Zakat Payment – Click Here 

All donations over $2 to NZF are 100% Tax Deductible. If you require a tax invoice, please email us at finance@nzf.org.au.