According to the Hanafi madhab, Zakat has to be paid by Muslim adults who are mentally sane and in possession of an amount of wealth [net assets] above the Nisab.
The Shafi, Maliki and Hanbali madhabs are of the view that Zakat is also payable by children and the insane, as long as their wealth is above the Nisab threshold.
The word nisab means the minimum amount of property or wealth / assets that must be owned by a Muslim before s/he is obliged to start paying Zakat. This minimum amount is called the nisab threshold.
You first become eligible to pay Zakat the day your wealth hits the Nisab threshold. The Zakat is calculated and paid on the wealth of a person after a full lunar / Islamic year. A lunar year is about 354 days long.
Example: Abdullah has recently started working and is paid R1,000 after one month. He has no debts and therefore his wealth is the full R1,000. The Nisab threshold at the time is R190. Therefore, Abdullah becomes obliged to pay Zakat as his new wealth is above the Nisab threshold.
After 354 days – a full lunar year – it’s time for Abdullah to reassess his situation and see how much wealth / net assets he has over and above the Nisab threshold.
Abdullah works out that he has saved R10,000 and has immediate/short-term debts of R2,000.
Hence, at the end of the lunar year, Abdullah’s wealth or net assets are worth R8,000 and the Nisab at that point in time is R200.
Therefore, Abdullah will need to pay 2.5% of the R8,000 as Zakat, which is R200.
Many Muslims pay their Zakat during Ramadan, as it is easy for them to remember when the Zakat is due. Often, they pay on the 27th night of Ramadan to try and maximise their rewards.
The more correct Islamic process, however, is to calculate and pay the Zakat one lunar / Islamic year from the day your wealth exceeded the Nisab threshold.
The Nisab is the minimum amount of wealth a Muslim must possess before they become eligible to pay Zakat. This amount is often referred to as the Nisab threshold.
Gold and silver are the two values used to calculate the Nisab threshold. The Nisab is the value of 87.48 grams of gold or 612.36 grams of silver. You can find the current values on our website or at a jewellery store.
In the Hanafi madhab, the value of silver is used to ascertain the Nisab threshold and eligibility to pay Zakat. The other madhabs use the value of gold.
Islamic Relief advises its donors to use the Silver Value (which is almost always a lower Nisab threshold to gold) as this allows for a greater amount of your wealth to be eligible for Zakat which, in turn, means more help for the deserving recipients of your Zakat.
In explanations of Zakat, you may hear the term Hawl – which means a lunar year. A Hawl / lunar year is 354 days long. Sometimes it is simply referred to as an Islamic year.
The actual payment of Zakat is to be made one Hawl / lunar year after you become eligible to pay Zakat, if your wealth on that date is still at – or above – the Nisab threshold.
The moment you possess wealth above the Nisab threshold you become eligible to pay Zakat. However, no payment is due on that date itself.
The Zakat is to be paid after one full Hawl / lunar year – but only if your wealth at that future date is still above the Nisab threshold.
It does not matter if your wealth decreases or increases during the year. It is the value of your wealth / assets at the end of the lunar year that is used to calculate and pay the Zakat, (if it still exceeds the Nisab).
Example 1: The Nisab threshold is R200 today and Abdullah has R1,000 in savings and no debt. His wealth / net assets are R1,000 and, therefore, he becomes eligible to pay Zakat.
After a Hawl / lunar year passes, Abdullah has become richer and has savings of R2,000. The Nisab threshold has also risen to