The first and foremost priority in life is our family because our loved ones are the center of our world. Without them, everything in this world would seem so absurd.
Therefore, we toil hard from dawn to dusk each day to nourish them and to fulfill all their fundamental necessities. We would go to any extent to make their every wish come true. We love them so we want them to be happy.
After such exhausting labor to provide for our family, most of us fail to follow the command of Allah and fulfill one of our mandatory duties i.e. paying Zakat.
Allah the Almighty has commanded every Muslim to pay Zakat because this compulsory giving purifies our earnings. It saves us from depriving the poor and needy from their rights, purifies our souls from greed and misery.
Allah the Almighty has clearly warned us of our fate on the Day of Judgment if we deliberately do not pay Zakat in the Quran as follows:
“And let not those who [greedily] withhold what Allah has given them of His bounty ever think that it is better for them. Rather, it is worse for them. Their necks will be encircled by what they withheld on the Day of Resurrection. And to Allah belongs the heritage of the heavens and the earth. And Allah , with what you do, is [fully] Acquainted.” (3:180)
To further explain, Prophet Muhammad (PBUH) said:
“Whoever Allah has granted wealth but does not give its Zakat – for him will be formed on the Day of Resurrection a poisonous snake with black growths over its eyes. It will wrap itself around his neck and then begin biting his cheeks, saying, “I am your treasure, I am your wealth.”
When to pay Zakat?
The moment a Muslim becomes the owner of the Nisaab amount he will have to wait for a complete year in the Islamic calendar to pass, starting from the day on which he became the owner of the Nisaab’s possession before paying the Zakat.
During this time if the Nisaab amount decreases to zero then he need not pay Zakat. In such cases, a new yearly cycle (hawl) will start and stay until the day Nisaab becomes complete again. After this time you would be considered eligible for Zakat.
Once your Nisaab amount completes one lunar year you must distribute your Zakat immediately.
After all, we cannot trust our own breathe as it can stop at any moment. If a person dies before paying Zakat, then it would be the duty of the children to distribute the due amount on behalf of their late parents.
How do you calculate your Zakat?
Nisaab is the cut-off amount. When your personal wealth is above the Nisaab amount you will be eligible to pay Zakat. If your wealth is below the Nisaab amount then you do not owe Zakat.
Nisaab is calculated based on the cash value equivalent of 3 ounces (87.48 grams) of gold or 21 ounces (612.36 grams) of silver. Calculating Nisaab is simple.
If the current rate of silver is $20 then the Nisaab amount will be ($20 X 21 ounces = $420). If your personal wealth is above $420, you owe Zakat.
If you have any loans from the bank, calculate its monthly installments and then multiply by 12 to know your annual liability. Calculate your credit card debts as well. Also calculate your monthly expenses like rents, bills and tuition fees of children etc.
Calculate all your assets excluding those you use for your everyday life like your primary residence, car, clothes and business equipment because they are not eligible for Zakat.
In the next step deduct the total amount of your liabilities and expenses from your Zakatable assets. Consider your total asset worth $9000 and your liabilities will cost you $3000.
So your Zakatable asset will be ($9000-3000) or $6000.
You will pay $150 for Zakat ($6000X 2.5% = $150).