Zakat calculation and its significance

Zakat is one of the five pillars of Islam on which the foundations of the religion stand. It refers to the giving of alms to the poor and needy among the Muslim Ummah. It is obligatory on every adult Muslim who owns a specific amount of wealth and/or savings.
The Prophet (PBUH) said:

“Do not withhold your money, (for if you did so) Allah would with-hold His blessings from you” (Sahih Bukhari: 1433)

In another hadith, with respect to the importance of Zakat, Abu Hurairah (RA) narrated:

Allah's Apostle said, “Whoever is made wealthy by Allah and does not pay the Zakat of his wealth, then on the Day of Resurrection his wealth will be made like a bald-headed poisonous male snake with two black spots over the eyes. The snake will encircle his neck and bite his cheeks and say, 'I am your wealth, I am your treasure.'”(Sahih Bukhari: 1403)

The idea behind giving Zakat is that of purifying your wealth and property and giving some away in the name of Allah Almighty who is the Most Merciful and Benevolent. In the Quran, Allah says:

“[Alms are] for the poor who have been restricted for the cause of Allah, unable to move about in the land. […]”. (Surah Al-Baqarah 2:273)

Who deserves Zakat?

“The alms are only for the Fuqara (the poor), and Al-Masakin (the needy) and those employed to collect (the funds); and to attract the hearts of those who have been inclined (towards Islam); and to free captives; and for those in debt; and for Allah’s cause, and for the wayfarer (a traveler who is cut off from everything); a duty imposed by Allah. And Allah is All-Knower, All-Wise.” (Surah Taubah 9:60)

How to calculate?

Zakat is payable on the amount of savings and wealth left after expenditure for subsistence. This amount is known as Nisaab, which must be equivalent to 85 grams of gold or 595 grams of silver. In consequence, 2.5% is the amount of money which has to be given as Zakat. However, calculating the amount of Zakat on different kinds of assets is a lengthy task.

For your convenience, you should set a date each year around which you must calculate your Zakat. Zakat is payable on silver, gold, cash along with merchandise that is brought for business. Hence, when the date arrives, you should add up all the payable assets subtracting any debts or current expenditure. The 2.5% is to be paid on whatever assets remain after deduction. Zakat is payable on what remains saved on that particular date (and not on what is spent), making income irrelevant for the purposes of Zakat.

If you are confused as to how you calculate Zakat or what items should be included when making calculations, use Zakat calculator by IslamicFinder.

In the Quran, time and again Allah says:

“Eat from their fruits, and give the due alms on the day of harvest.” (Surah Al-Anam 6:141)

There is much emphasis on giving to the needy and poor and each year. Hence if we pay our Zakat on time, we can include these sections of society and play an active part in bettering their conditions, that too in the name of Allah Almighty. For more information, take a look this video: