Subject: 🎯 What you MUST know: The Basics of Zakat

An Intro to the Basics of Zakat by NZF Australia

Although it is the third pillar of Islam, the technicalities associated with Zakat can often overwhelm us into thinking it is a daunting task. National Zakat Foundation Australia has been at the forefront of simplifying Zakat.

Here is your essential 101 guide, further to our other materials, to help you understand your obligation!
1. Nisab
  • Refers to the monetary figure which - once exceeded - makes you eligible to give Zakat
  • Monetary figure is currently $407 based on Silver as at 15th June 2019
  • Exceeding Nisab at any point in your life and in the last 12 months (1 lunar year) makes your wealth Zakatable
2. Anniversary
  • Zakat anniversary is 1 lunar year from the date your wealth exceeds the nisab
  • Zakat anniversary marks the date you calculate and pay your Zakat
  • If you cannot remember, then pick an arbitrary Zakat anniversary date (last 10 nights of Ramadan is recommended)
3. Jewellery
  • NZF adopts the view that Zakat should be paid on jewellery
  • For lower carat gold items, Zakat is only due on the proportion that contains gold
  • For silver alloy items, Zakat is only due on the proportion that contains silver
4. Zakat for Husband Vs Wife
  • Wife should pay Zakat on her wealth. Husband is not obliged (but more rewards if he does!).
  • If parents have authority over their children’s wealth, it must be considered for Zakat calculation
5. Missed Zakat
  • If you have missed Zakat in previous years, then estimate as best as you can.
  • If you have no records, then 2.5% of the estimated average of your highest and lowest wealth during current Zakat anniversary period should be the Zakat payable for each missed year
6. Superannuation
  • NZF adopts the view that if you can dictate how your superannuation assets can be invested, then Zakat is due on the value of voluntary super contributions
  • For personal superannuation plans, all contributions are Zakatable
7. Mortgages & Offset Accounts
  • If you have taken a large loan or a shar’iah compliant mortgage then you have two options:
  1. Include next month’s repayment as a liability or
  2. Include up to next 12 months’ repayments as a liability
  • Note: There is no Zakat on riba-based mortgage
  • Balance in Offset accounts in which you have full control over must be considered in your Zakat calculation
To learn more about Zakat or to ask us more questions, visit our website, http://nzf.org.au
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