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 must pay a set 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 which do not truly belong to us.
Zakat’s meaning varies depending on context and the word is utilised in multiple ways throughout the Holy Qur’an. Generally, Zakat means to increase, grow and purify and in the context of the Five Pillars of Islam, the Zakat payment is given to purify one’s income and wealth and is a good example of 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 is calculated at 2.5% of an individual's total profitable wealth above the nisab threshold, including possessions, savings 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 additional property and car investments must be included when calculating your Zakat.