Zakat Essentials

What Are the Categories of Zakatable Wealth?

All possessions can be classified into either Zakatable or Non-zakatable wealth. For the purpose of Zakât calculation, Muslim scholars have established five categories of zakatable wealth:

  1. Personal Zakatable Wealth: This includes money on hand and in bank accounts, stocks, and money held in retirement and pension accounts.
  2. Business Zakatable Wealth: This is further classified in two categories:
    • Trading goods that include business lists of goods in stock
    • Exploited assets such as rented properties and factories.
  3. Agricultural Produce:
    • Crops from irrigated land, wherein the irrigation system entails costs and labor.
    • Crops from non-irrigated land watered by rain or natural springs.
  4. Livestock:Animals raised for commercial purposes— primarily sheep, goats, cows, and buffaloes.
  5. Treasure Troves (rikâz): This includes valuables that people have buried and left, natural resources, such as oil, precious metals, and gemstones. It can be classified more specifically as:
    • Hidden windfalls and discovered fortunes.
    • Oil and mining.
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What Constitutes Non-Zakatable Wealth?

In general, Zakât is calculated on personal net worth, excluding properties and items for personal, family, and commercial use. Public properties are also non-zakatable. Below is a partial list of wealth that is Zakât-exempt:

  1. Property for Personal, Family, and Commercial Use: This category contains seven primary kinds of wealth:
    • Food: As stored for consumption by an individual or family.
    • Clothing: All personal and family apparel.
    • Residence: The domicile owned and occupied by the owner, including furnishings, utensils, and apparatus used for basic needs and necessity.
    • Transportation: The means of personal and family transport, such as vehicles used by an owner and family members.
    • Domestic Animals and Poultry: If used for household food and needs, one may own kinds and quantities in this category as follows (Note: the following numbers of animals for personal use and consumption are based on one Zakât payer. If more than one Zakât payer domicile together, or keep their animals and land collectively, the numbers would increase accordingly):
      • Cows (bovines): 1-29
      • Sheep, goats (ovine): 1-39
      • Poultry (chickens etc.): Unlimited (household needs only)
      • Personal Use (pets, horses, etc.): Unlimited
    • Tools: Devices, instruments, and equipment used in one’s personal business.
    • Agricultural Land: The land itself, animals, and equipment used in cultivation.
  2. Property in Public Trust: Properties used for mosques, schools, hospitals, orphanages, etc.; those designated for endowment (waqf) for the benefit of the needy; and the funds generated from such properties—all are non-zakatable (Fiqh az-Zakât, 338).
  3. Unlawful Wealth: Only lawful assets are worthy of the blessing of Zakât. Zakât cannot be calculated on prohibited or unlawful wealth, such as interest income, stolen property, or wealth acquired or earned through unlawful means, such as extortion, forgery, bribery, monopoly, and cheating. Such wealth must be returned in full to its lawful owners. If that is impossible, it is to be given away to the poor in its entirety (Fiqh az-Zakât, 72).
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Who Can Receive Zakât?

Zakât is paid to deserving individuals who come under one or more of eight zakatable categories designated by God in the Quran.

Indeed, [prescribed] charitable offerings are only [to be given] to the poor and the indigent, and to those who work on [administering] it, and to those whose hearts are to be reconciled, and to [free] those in bondage, and to the debt-ridden, and for the cause of God, and to the wayfarer. [This is] an obligation from God. And God is all-knowing, all-wise. - Al-Tawbah, 9:60

The Quran specifies how Zakât is to be distributed precisely, but grants Muslims maximum flexibility in its collection. On one hand, this guarantees the right of the needful. On the other, it accommodates inevitable changes and variation in stores of wealth, effective distribution mechanisms, and diverse societies through time and in different places in the world. Trustworthy Muslim institutions collect and distribute Zakât to the deserving they identify as belonging to one or more of the zakatable categories prescribed in the Quran.

It is noteworthy that Allah, Himself, identified for Zakât payers and administrators the eight human categories of Zakât disbursement—leaving this neither to ruler, nor to scholar, nor to the Prophet himself. It is reported that a man once came to the Prophet and asked him Zakât. The Prophet said:

Allah permitted not even a prophet to adjudge Zakât-[worthiness]. Rather, He Himself ruled on it and permitted it in eight cases. Therefore, if you belong to any of these, I shall most surely give you your right. - Abû Dâ’ûd

The eight categories of eligible Zakât recipients follow:

  • The poor (al-fuqarâ’)
  • The needy (al-masâkîn)
  • Zakât-workers
  • Those whose hearts are to be reconciled
  • Those in bondage (slaves and captives)
  • The debt-ridden
  • In the cause of God
  • The wayfarer (the stranded, or one traveling who lacks resources)
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Can Zakât Payers Restrict the Use of Their Payments?

GENERAL RULE: Charities are a sacred trust (amânah) to be spent according to the giver’s wishes, provided they are in accordance with the injunctions of the Quran and the specifications of the Prophet.

Islam enjoins administrators of charity—including Zakât— to honor the legitimate purposes intended by its payers for the charity they have vouchsafed them. Whether individual, organization, or government agency, Islam considers the appointed executor of Zakât and sadaqah charity a temporary trustee (wakîl) over all such funds, which are deemed “restricted” or “designated,” and which the trustee is constrained by Divine Law (Sharî’ah) to disburse as intended by its giver. The trustee is no more than a conduit between payer and recipient, empowered only to act as intermediary. The trustee’s agency powers expand (only to the full breadth of the injunctions of the Quran pertaining to the gift) if the payer of Zakât (or sadaqah) imparts his or her payment to the trustee with no further designation than identifying it as either Zakât or sadaqah, which must be done. In this case, the trustee can disburse such unrestricted Zakât (or sadaqah) as is deemed best, again, in accordance with the limitations set by the Quran and defined by the Prophet.

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What If the Trustee Cannot Comply with a Restriction?

If a charitable organization accepting Zakât cannot execute a Zakât payers request (or any charitable donor) it must either contact the payer and receive approval for another legitimate Zakât use, turn the Zakât payment over to another charity that can execute the payer’s request (with the payer’s consent), or return the payment to the payer, notifying him or her of its limitations.

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How Important Is Local Zakât Distribution?

GENERAL RULE: Zakât must be disbursed in the area where it is collected. The poor and needy of a locality where Zakât is collected have priority over all others as recipients. (Fiqh az-Zakat, 515; for exceptions to this, see next question).

Local distribution of Zakât from a community’s wealthy to its poor is the Sunnah of the Prophet and, consequently, paramount. The Prophet œ established this precedent with Mu’âdh ibn Jabal in Yemen with unmistakable language, as we have seen. Furthermore, Mu’âdh, himself, divided Yemen into local regions and had Zakât collected and distributed from the wealthy of those internal localities to the poor of the same place of collection. Many other verified accounts from the Companions to this effect exist. Indeed, the principle of local collection and distribution has been the established practice implemented by every succeeding Muslim generation, and endorsed by all the scholars. To take Zakât out of locality and give it in another place when poor still remain in the locality is a serious violation of Zakât, if there are no extenuating circumstances. Nor can this obstacle be easily overcome. In a well-known case, ‘Umar ibn Al-Khattâb was queried about the Zakât of the Bedouins [who were nomadic]. He replied, “By Allah! I shall render sadaqah (here, meaning Zakât) to them until each one of them becomes the owner of 100 camels, male or female” (Al-Musannaf, 3:205). That is to say, each one of them would become wealthy before removing the Zakât of the Bedouins (who were generally very poor) from their locality. This prevention is particularly strong when it comes to Zakât in-kind (livestock, crops, etc.). There is some scholarly disagreement if one’s Zakât is monetary and earned in one place, while its payer lives in another. Most scholars consider it payable in the place where the payer resides, rather than where it was earned (Fiqh az-Zakat, 511).

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Is Local Zakât Distribution Without Exception?

No. As we have also seen, when local need is sufficed and Zakât funds remain in the repository, it is permissible to move that surplus from a locality to a central Zakât Bayt al-Mâl (Zakât treasury) for disbursement. There is no such established entity in America as of yet. In addition, it is crystal clear that legitimate authorities in Muslim polities can transport Zakât as they see fit for the greater good of all. In the absence of this, Shaykh Yusuf Qardawi argues, the Muslim individual inherits that authority in the case of his or her own Zakât payment: “Individual payers can…decide whether to transport due Zakât to needy relatives, to people who are in dire need, for essential public interests of Muslims, or to a pivotal Islamic project in another country” (Fiqh az-Zakat, 517). He states, as well, that the Zakat agency must not transport all the collected Zakât unless there is no local need at all for Zakât funds” (Fiqh az-Zakat, 517). There are other stipulations that permit removal of some Zakât funds outside the community. If Muslims of one community are affluent and without essential need, or if there is an overwhelmingly more urgent need elsewhere—extreme poverty, life-threatening displacement, catastrophic loss—then a portion of Zakât from one community must be moved to another—even if very far away. Muslims are brothers one to another, and they are like one body. We cannot look away from Muslims anywhere in need—even if this should mean that we sacrifice some of our own need for the sake of solidarity, and to relieve the suffering of other Muslims. There is evidence that the Prophet practiced this. And Imam Mâlik said: “It is not permitted to move Zakât [from one locality to another], unless its need is more urgent in another locality” (Al-Amwâl, 595). The practice seems clear that a locality’s poor and needy should be sufficed, and, in the case of dire need, a portion of Zakât can and should be transported to help the desperate (Fiqh az-Zakat, 515-17).

The Idea of Philanthropy in Muslim Contexts” - Jon B. Alterman and Shireen Hunter, The Center for Strategic and International Studies, February 22, 2004.

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Can Zakât Ever Be Substituted by Other Payments?

The Zakât-Charity is obligatory not optional; it is worship, not a tax. No matter the country one lives in, and whether one’s taxes increase or decrease, there is no substitute for paying Zakât. Zakât is a permanent and continuous Pillar of Islam. No tax can ever replace it. No circumstance can ever preclude its payment whenever it comes due. God, Himself, has made the giving of Zakât to the needy and entitled a sign of loyalty to Him.

Governments may forgive unpaid taxes, but none can absolve one of due Zakât payments—no matter how far back they accumulate—for Zakât is other people’s money. Muslim scholars, such as the Eleventh-Century Andalusian polymath Ibn Hazm, have said that one who has failed to pay Zakât shall have one’s due Zakât calculated at its set percentage rate and then multiplied by the years it was not paid—even if this consumes all of one’s wealth. Other scholars hold that nonpayment of Zakât forfeits one’s right to transact business. Moreover, if a transaction stipulates that a portion of profits shall inure to the benefit of a Zakât fund, nonpayment of that fund nullifies the contract.

Zakât is a solemn obligation. The moment it falls due upon one’s wealth, that portion no longer belongs to the wealth-holder. The poor and eligible automatically become its rightful owners. Let no believing man or woman feel content with the wealth God has granted them until they have duly distributed the Zakât due on it to the poor and needy, who are its lawful trustees in the sight of God.

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Zakat Foundation of America, a Muslim charity that collects zakat, sadaqa / donations to provide humanitarian, emergency relief and sustainable development programs to empower lives throughout the world. We offer top Zakat resources including The Zakat Handbook: A Practical Guide for Muslims in the West, Zakat kit, ask an Imam feature, and you can calculate and pay zakat through our easy, online calculator.

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