One of the Five Pillars of Islam, Zakat is a fundamental part of being a Muslim. Meaning purification, Zakat is the act of giving a set percentage of your total wealth to charity each lunar year and is required of every sane, adult Muslim whose accumulated wealth exceeds the current Zakat nisab value.

Zakat is so much more than just giving to those in need – paying Zakat is an act of worship. At Alhasnaat Foundation, we understand this wholeheartedly, which is why we strive to ensure that your Zakat payment reaches the most vulnerable and needy communities in the world, quickly and effectively.

Considering all the different items and details that must be kept in mind, understanding the Zakat nisab value and calculating your Zakat can be a challenging task. To address this, the Alhasnaat Foundation team has put together this brief guide explaining everything you need to know about calculating and paying Zakat, including the Zakat percentage of your wealth that must be paid and whether Zakat is tax applicable in the UK.

Zakat and the Nisab Value Explained

The Zakat nisab value is the minimum threshold required for an individual to be eligible to pay Zakat in that specific lunar year. Your total overall wealth must meet or exceed the nisab value in order for you to be eligible to pay Zakat.

The nisab value is directly related to the current values of gold and silver. In the Holy Qu’ran, the nisab value is described as 612.36g of silver or 87.48g of gold. Originally, these values of silver and gold were equal but in the current day, they have become different, with the silver nisab being significantly lower than its gold counterpart. You can calculate the nisab value at any given time by converting these weights into your local currency.

What is the Zakat Percentage?

Your Zakat donation should amount to 2.5% of your annual total wealth accumulated over the year. As an example, if your total assets (after any debts owed) amounted to £10,000, then you would be required to pay £250 as Zakat.

What is Zakat Due On?

When calculating your total wealth and assets, you must consider the following:

• The value of gold and silver items owned
• Money in your bank accounts or in cash at home
• Loans that you have given out
• Pensions, stocks, shares and investments
• Property owned as an investment (excluding the property you live in)
• Farm and agricultural produce

Zakat and Tax in the UK

In the UK, tax can impact Zakat in a variety of different ways.

For most, personal taxes like road and income tax are not exempt from Zakat. The only exception to this is when the taxes being paid are overdue, in which case they become a debt which is deductible, though this is a rare situation.

For some, especially business owners, filling in tax returns is an important part of being self-employed. In this situation, many individuals will keep money in their bank specifically for when they fill in their tax returns. This figure being saved for tax is deductible from the Zakat total.

Paying Your Zakat

Hopefully, you will now know the exact amount of Zakat you owe and are ready to make your payment. As an obligatory act of worship, your payment should go towards helping Zakat-eligible individuals, as decreed by the Prophet Muhammad (PBUH).

The majority of our campaigns and appeals are Zakat-eligible, meaning that your donation has the power to really make a difference when you partner with us.