What is Zakat?
There are five core practices in Islam which are known as the Five Pillars of Islam. The third Pillar is Zakat, whereby Muslims are required to contribute a fixed percentage of their total annual wealth to support those in need. Zakat is a charitable donation that is given to help those without the means to support themselves, and excess wealth is distributed in accordance with the wishes of Allah (SWT). After all, our goods and wealth are merely material possessions that do not truly belong to us.
Zakat’s meaning varies depending on the context, and the word is utilised in multiple ways throughout the Holy Qur’an. Generally, the Zakat meaning is to increase, grow, and purify. In the context of the Five Pillars of Islam, the Zakat payment is given to purify one’s income and wealth, displaying the altruistic attitudes of Muslim communities. This is a key reason why Zakat is important to Muslims around the globe, as it represents their dedication to faith and charity.
The contribution made for Zakat is a set percentage of an individual’s total profitable wealth on the condition that their total annual combined wealth surpasses the threshold known as the Nisab value.
Zakat equates to 2.5% of an individual's total profitable wealth above the Nisab threshold, including savings, possessions, and precious resources. Belongings that contribute to your comfortable day-to-day living, such as your clothing, your home, and your car, are not included. However, any surplus property and car investments must be included when calculating your Zakat.