When Zakat is paid annually - How do I work out how much wealth to pay it on

[muslim58260]

If I am paying Zakat annually in one lump sum say from
Ramadan 1 1432AH (Mon 1st August 2011) to Sha'ban 29 1433 AH (Thursday 19th July 2012)

So I am going to pay on the last day of the period Sha'ban 29 1433 AH (Thursday 19th July 2012)

At the start of the period Mon 1st August 2011 I had savings of £1,000.
My savings were increasing at a rate of £1,000 per month on the 19th of the month (which is when I am receiving my salary) so on the 19th August my savings increase by £1,000 to £2,000
And by the end of the period I have savings of £13,000
Full table below



How much Zakat will be due and on what basis is it calculated?

Please could you allow me to post a follow up question since I think it may be necessary for me to clarify.

Jazakallah

[abuhajira]

InshAllah I will go through your question. For the time being, please go through http://askimam.org/public/question_detail/17114 and see if you understand everything in that link. InshAllah will answer your question afterwards.

[abuhajira]

In principle, zakāt is paid on the nett savings (or nett zakatable assets) over a period of one whole year provided that the savings meet the level of nisāb. You may read the process of calculating nett zakatable assets at : http://askimam.org/public/question_detail/17114

In the example which you have provided, all the savings throughout the year will be added to the opening balance and then expenses will be deducted from this total to give a final nett zakatable asset. Assuming that the table you have shown reflects the nett savings, then zakāt will be calculated on the figure as at Ramadhān 1, 1433 AH (i.e £13,000). [1]

And Allah Ta’āla Knows Best

Mufti Faisal bin Abdul Hameed,
Montréal, Canada

Checked and Approved by,
Mufti Ebrahim Desai.

[1]
((والمستفاد) ولو بهبة أو إرث (وسط الحول يضم إلى نصاب من جنسه) فيزكيه بحول الأصل)... أدخل فيه المفاد بشراء أو ميراث أو وصية وما كان حاصلا من الأصل كالأولاد والربح كما في النهر (الدر المختار وحاشية ابن عابدين (رد المحتار) (2/ 288))

[muslim58260]

Jazakallah brother

I have throughly read both your reply and the information that you have linked to on Askimam.

Follow up questions that I have are

Q1 - Is it possible to pay Zakat on a monthly basis

Q2 - If the answer to Q1 is yes, then is it preferable to pay monthly or annually

Q3 - If the answer to Q1 is yes then looking at the historical information provided in the table above, had I been paying Zakat monthly say on the 19th of every month, how would I have calculated how much Zakat was due on the 19th of every month starting with the 19th August, then the 19th of September etc.

[abuhajira]

1. In principle zakat is calculated on a yearly basis. It is also permissible to give zakat in advance. Therefore, a monthly arrangement can be made where a stipulated amount will be dispensed every month.

In your chart your overall expected nett savings for the whole year is £13,000. This means that should your savings continue as per your expectations, then by the end of the year you will have to pay £325 in zakat. You can disperse this amount over twelve months and pay £27.10 every month.

Now, at the end of the year, you can reconcile the zakat accounts by calculating the actual nett savings and comparing with the estimated nett savings.

a. If your actual nett savings turn out to be more than your estimated £13,000 then it would mean you have to pay extra zakat. Calculate this extra amount of zakat and give it out. This way you would have paid out all your zakat for the year on monthly basis.
b. If your actual nett savings turn out to be less that your estimated £13,000 then it would mean you have paid extra zakat. In this case calculate the amount of zakat which you have paid extra and carry it forward to the next year, as an advance payment. In the calculation of next year, you will not pay this extra amount.

2. It would depend on a person’s financial condition and ease of dispensing the zakat. If one can find an avenue to give out zakat on a monthly basis, and the process eases his concern to dispense then there is nothing wrong with it. Some companies like to keep a track of zakat paid out, and it makes it easier and cheaper for their accounting books to do a single transaction rather than multiple transactions.

3. Follow the procedure given in #1.

P.S. Please note that zakat is calculated according to the lunar year and not the solar year.

And Allah Ta’āla Knows Best

Mufti Faisal bin Abdul Hameed,
Montréal, Canada

Checked and Approved by,
Mufti Ebrahim Desai.

[muslim58260]

Brother your answer on this thread and the link to askimam and your replies on the other thread I posted regarding Zakat on Gold and Silver have been very helpful.

To clarify the information I presented in the table in my first post on this thread, was simplified to allow me to understand the factors since I am going to advise the other six members of my immediate family on the methodology to calculate Zakat.
I will also attempt to disseminate this information to members of my wider family and friends so the reward for us both will increase further.

My query has been resolved so this thread can be closed.

[abuhajira]

for your duas. May Allah put ikhlas in all our deeds Ameen