Zakat is the third pillar of Islam. It signifies the amount of wealth a Muslim pays to the poor and less privileged people. Zakat is a compulsory act of worship and signifies the responsibility and duty the richer have towards those in need. Literal meaning of the word Zakat is ‘to cleanse.’ Muslims believe that paying Zakat purifies their wealth and pleases Allah SWT.

Nisab is a term that denotes the minimum amount of wealth Muslims must have before Zakat becomes obligatory upon them. They are required to donate 2.5% of their total wealth to those in need.

Nisab was set by Prophet Muhammad (صلی اللہ علیہ وسلم) at 20 Mithqaal (مثقال) of gold or 200 dirhams of silver. This is the equivalent of 87.48 grams (7.5 tola) of gold and 612.36 grams (52.5 tola) of silver, respectively.

Zakat brings one closer to Allah SWT. As an obligatory act of charity, it ensures that the poor and needy are protected from deprivation, hunger and financial insecurity. Zakat not only benefits those in need but also brings countless blessings to the ones who pay it. It cleanses our wealth, wipes away minor sins and purifies heart and soul from stinginess.

“Alms (here it means Zakat) are meant only for the poor, the needy, those who administer them, those whose hearts need winning over, to free slaves and help those in debt, for God’s cause, and for travellers in need. This is ordained by God; God is all knowing and wise.” (Quran 9:60)

Here are the eight categories of recipients of Zakat:

1. The poor (Fuqara)
2. The needy (Masakeen)
3. Collectors of Zakat (Al-‘Aamileen)
4. Friends of the Islamic community and/or convert Muslims (Al-Mu’allafatu-Al- Quloob)
5. The cause of (freeing) the slaves (Ar-Riqaab)
6. Debtors (Gharimeen)
7. The way of Allah SWT (fi Sabilillah)
8. Wayfarer (Ibn-us-sabil)

Zakat must be paid by the one who is:

• Muslim
• Major (Baligh)
• Sane
• Owner of wealth, above the level of Nisab (Sahib-un-nisaab)

If all the above apply, you have to pay 2.5% Zakat on all of your savings and other applicable assets.