Zakat is one of the Five Pillars of Islam, and it is not charity; rather, it is obligatory for Muslims to give Zakat when their wealth meets the necessary criteria every lunar year.

According to the Hanafi school of thought, Zakat is obligatory for every adult, mentally sound Muslim who possesses a Zakatable asset exceeding the threshold (nisab). Meanwhile, the Shafi'i, Maliki, and Hanbali schools hold the view that Zakat is also obligatory on children and the mentally incapacitated if their wealth reaches the nisab threshold.

The percentage for Zakat depends on the type of Zakatable asset: Personal and Business inventory require 2.5% or 1 portion of 40. For Plantation and farm products, the Zakat rate ranges from 7.7% to 10%, while for Treasure, it is set at 20%.

For wealth to be subject to Zakat it must first reach a minimum value called Nisab (threshold).

The Nisab is calculated by either using the current value of 85g of Gold or 595g of Silver.

Hence, if you have wealth that is over the value of 595g of Silver for one lunar year, then you need to give Zakat on your wealth.

Any wealth that has the potential to grow and increase it's value and are specified by the Sharia. The most common types of wealth subject to Zakat are cash, gold and silver & property.

Other types of wealth also include business, shares, superannuation, livestock, and agricultural produce.

You need to calculate & give your Zakat once every Lunar (Islamic) year, and this is referred to as your Zakat Anniversary Date. Your Zakat anniversary is exactly one lunar year after the date when your Zakatable wealth first reached or exceeded the value of the Nisab.

If you cannot remember the date your wealth first reached that level, then the date should be estimated. If this is not possible, then a specific Islamic date should be selected arbitrarily and adhered to annually going forward, for example 10th of Ramadan.

It’s important to stick to your Zakat anniversary date as it ensures correct calculation and fulfilment of your Zakat obligations.

There is significant evidence in this history of Islam, from the time of the Prophet Muhammad (SAW), the Sahaba and from the teachings of the four main schools of thought in Islam that the those in need in a locality have a greater claim over the local Zakat, than those outside that locality.

It is an obligation and compulsory to pay your Zakat where your zakatable asset generated. All Islamic school of thoughts have contested Zakat is practiced local.

The purpose of Zakat is ultimately to increase faith and devotion to Allah. In addition:

• It acts as a social safety net for those in need.
• It is a means to uplift the entire community and help Muslims and Islam thrive.
• Zakat is a pillar of Islam and as such it works together with the other four pillars as a way of upholding and strengthening the religion.
• By giving Zakat Muslims cleanse their own wealth.
• Zakat helps to keep the economy flowing by freeing people from burden and giving them the chance to reach their potential.

Zakat, when implemented properly, will have a long-term impact for the state of the whole Muslim community.

It is recommended to use the Lunar (Islamic Hijri) calendar when calculating Zakat. Using the Lunar calendar you pay 2.5% in Zakat however it is still permissible to use the Gregorian calendar. In this case though, you will need to pay 2.577% Zakat. It is recommended to stick to the Lunar calendar to avoid miscalculating your Zakat.

Here is an example-
If your Zakat anniversary is on the 1st of Ramadan, last year that would have meant your Zakat anniversary was on the 23rd of March 2023. The year before that it would have meant your Zakat anniversary date was on the 2nd of April 2022. So if you had stuck to the Gregorian calendar, you would have missed your actual Zakat anniversary by 10 days. If you are married and your spouse normally expects you to mark your wedding anniversary, imagine how they would feel if you remembered not just one day later but almost two weeks later.

Yes, all three have very different purposes in Islam.

• Zakat al-Mal (commonly called 'Zakat') is one of the five pillars in Islam, an obligation ordained by our Creator. It is due when a Muslims wealth reaches the nisab (threshold) amount. It is paid annually on their Zakat anniversary. Muslims are required to pay 2.5% from their Zakatable wealth.
• Zakat al-Fitr is given by the head of the household for each member of the family, before the Eid al-Fitr prayer. All Muslims must give Zakat al-Fitr regardless of their age or financial status, unless they themselves do not have the means to do so, Hence, they could be eligible to receive Zakat ul-Fitr or Zakat themselves.
• Sadaqah is voluntary donations, and there is no limit on how much you can pay or when you pay.

As per the Qur’an (Surah Al-Taubah 9:60) there are 8 categories of people who are eligible to receive Zakat. Local scholars in your country of residence will determine the criteria for someone to fall into these categories. It's critical to ensure that the recipient of your Zakat qualifies under one of these categories; otherwise, your Zakat obligation may not be fulfilled.

There are 8 categories of people to whom Zakat can be distributed. These have been identified as:

• Al-Fuqara: The Poor
  According to the majority of jurists, the poor are those who do not have any assets and have no means by which they can earn their living. However, the Hanafi jurists defined the poor as those who have money lesser than the amount on which Zakat is payable. The poor are worse than the needy in regard to satisfying their basic needs. However, some scholars hold the opposite view.
• Al-Masakin: The Needy
  According to the majority of jurists, the needy are the people whose earnings do not cover their basic needs. However, the Hanifi jurists identified them as ‘those who have no earnings at all’. The Hanafi and maaliki jurists consider them to be more deserving of Zakat than the poor. However, the Hanbali and Shafi`i jurists put the poor as being more deserving of Zakat. Actually, this dispute in categorization has no effect, since both the poor and the needy are among the categories entitled to receive Zakat.
• Al-‘Amilina ‘Alayha: Administrators of Zakat
  This term applies to all those serving in the field of Zakat, including those responsible for collecting, storing, guarding, registering and distributing Zakat. They shoulder all Zakat related activities. The Zakat worker must be a Muslim, sane/mature individual, efficient, trustworthy and possesses knowledge of Zakat rules and regulations.
• Al-Mu’allafate-Qulubuhum: Reconciliation of Hearts
  This term applies to people who have embraced Islam or who are inclined to it.
• Fir-Riqab: For those in Bondage
  Zakat may be allocated to help Muslims free themselves of bondage.
• Al-Gharimin: Those in Debt
  Zakat may be used to pay off debts, so long as these debts were not incurred in an act contrary to Islamic law.
• Fi-Sabilillah: In the Cause of Allah
  Muslim jurists differ on who or what can be covered under this category, although most seem to agree that it can be used in the defence of Islam. In the wider sense however, this channel covers Da'wah towards Islam.
• Ibnas-Sabil: The Wayfarer
  A wayfarer refers to a traveller who left his home for a lawful purpose and for whatever good reason does not possess enough money to return home, even if he is rich in his own country.

Pay Zakat on the current amount you hold on your Zakat anniversary date, once you reach Nisab. All savings above Nisab after one lunar year (hawl) are zakatable at 2.5%

Use silver Nisab 595g silver) for mixed assets. Silver as a Nisab is recommended for more benefit to the poor. Gold Nisab (85g) applies if only gold. Convert gold/silver to cash value via jeweler, add to savings, then apply 2.5% if above Nisab. Visit our home page for live Nisab values

Fix an anniversary date (e.g., 1st Ramadan). Calculate on the balance that day after one lunar year above Nisab, ignoring daily fluctuations

As soon as your wealth reaches Nisab, pay on your anniversary date after one lunar year.

Pay once you reach Nisab, not after 12 months of earning. Your anniversary starts from Nisab date.

Yes, Zakat is on current savings (not income), due annually if above Nisab after hawl, minus short-term debts.

On savings, not income. Calculate 2.5% on total savings above Nisab after one lunar year.

Estimate savings each past lunar year from Nisab date, pay 2.5% per year missed. Do your best with records for previous years. For more details, read our free Zakat guides.

Take to a jeweller for buy-back value or weigh pure gold at current 24k price. Pay 2.5% of that value. Do your best - Allah requires effort only

Yes, if above Nisab for one year. Convert to cash value via jeweller.​

Yes, as guardian/trustee, pay Zakat on their wealth if above Nisab.

Yes, convert to cash value. You need to pay (e.g. sell a portion of the gold) and pay, even if you don't have cash. Zakat is a debt to purify wealth.

Yes, treat as accessible savings. Deduct only next month's payment, not full mortgage (long-term debt)

Long-term structured debts (HECS, mortgages) deduct only upcoming payments, not full amount. Short-term debts fully deduct.

No, deduct as debt from savings

Depends on intent (e.g., live-in home: no Zakat; investment: yes).

No if "bad debt."

No on compulsory (no access). Yes on voluntary contributions.

On accessible savings, not income stream

No on business tools/machinery. Land: no if no income; yes annually on value once developed for sale

Yes on trusts (pay as guardian)

Yes, if eligible (poor/needy), not those you're obligated to support (parents/children).

Yes to husband if qualifies. To mother: no if male (use own wealth); yes if female (brother's duty).

Yes, Zakat can be given to Non-Muslims if "bringing hearts to Islam."

Yes to relatives if they qualify and you're not under their care.

Al-Fitr: food. Al-Mal: cash preferred for ownership; recipient nominates (bills, vouchers). 100% to Australian poor/needy.

Yes (e.g., single mothers, refugees). Distributed year-round, Ramadan-to-Ramadan cycle.

Yes, apply at nzf.org.au/apply or call 1300 663 729.

Yes, NZF has DGR status. All donations over $2 are tax deductible.