Zakat can be paid to deserving individuals or groups who fall into one or more of eight zakatable categories designated by Allah SWT in the Quran.

Indeed, [prescribed] charitable offerings are only [to be given] to the poor and the indigent, and to those who work on [administering] it, and to those whose hearts are to be reconciled, and to [free] those in bondage, and to the debt-ridden, and for the cause of God, and to the wayfarer. [This is] an obligation from God. And God is all-knowing, all-wise.

(Surah At-Tawbah, Verse 60)

The Quran specifies how zakat is to be distributed precisely, but grants Muslims flexibility in its payment. This guarantees the right of the needful while accommodating changes in how wealth is stored, how money is best distributed, and how different cultures change over time. The Quran also makes it possible for Muslims to pay their zakat to trusted institutions that distribute it to those who belong to one or more of the zakat-worthy categories.

It is noteworthy that God Himself identified for zakat payers and administrators the eight categories for zakat disbursement. This determination is not up to the government, scholars, or even the Prophet himself. It is reported that a man once came to the Prophet and asked him zakat.

The Prophet said: Allah permitted not even a prophet to adjudge zakat[-worthiness]. Rather, He Himself ruled on it and permitted it in eight cases. Therefore, if you belong to any of these, I shall most surely give you your right.

(Sunnah Abu Daud)

Q2) Where can your zakat go?

1. The poor (al-fuqarâ’), meaning low-income or indigent.
2. The needy (al-masâkîn), meaning someone who is in difficulty.
3. Zakat administrators.
4. Those whose hearts are to be reconciled, meaning new Muslims and friends of the Muslim community.
5. Those in bondage (slaves and captives).
6. The debt-ridden.
7. In the cause of God.
8. The wayfarer, meaning those who are stranded or traveling with few resources.

Q3) Somebody owes me some money, and he promised to return it in 6 months’ time. My haul for my zakat payment will be coming soon. Must I include the amount in my zakat payment or is it permissible for me to exclude it because I am not sure of getting it back on time as promised?

As agreed by our scholars, you are not required to give zakat on something which you are unable to access even if you own it. So you may exclude the amount from zakat until you get it.

Q4) I am working and have a very stable income monthly. I constantly give donations to different Muslim and welfare organizations. Can I be exempted from giving zakat since I am a regular donor to the society?

Giving donations constantly is an act of amal and good deeds. It is highly encouraged in Islam and Allah SWT will reward those for their generous donations. Nevertheless, it does not eliminate nor exempt a Muslim from performing the third pillar of Islam which is giving zakat. Zakat is mandatory and it is an obligation for a Muslim to perform it.

Q5) Currently, I am a holder of various insurance policies. Am I required to pay zakat on my insurance policies? I understand that insurance is prohibited in Islam because it is related to uncertainty and act of usury. Can I get a clear explanation on this issue?

Our contemporary scholars have different views on this issue. They consented to takaful policy and most agree to the concept of conventional insurance. So it depends on the individual whether to proceed with conventional insurance or decline. If he is agreeable to the concept then he is obligated to zakat payment. He needs to check with the insurance company and determine his surrender value on the due date to his haul. The amount of zakat is based on the surrender value and multiply by 2.5%.

Q6) I am a retiree and have about $150,000 in my savings account. I`m not engaged with any permanent nor part-time job. I`m using my savings to sustain myself and support my wife for our expenses. Am I obligated for zakat on my savings?

Whenever a Muslim accumulates an amount of savings that meets the nisab and haul (1 year), he is obligated to pay his zakat despite his unemployed situation. A Muslim should not be sceptical and worry about his savings being depleted. He needs to believe totally about the barakah and rewards from Allah SWT.

Q7) I want to distribute my zakat to my circle of friends and acquaintances whom I believe they are eligible as one of the asnafs mentioned.  Is it permissible?

It’s permissible but not recommended. If it happens that they are not eligible for zakat, then it will be nullified. Secondly, we need to support our Muslim society and strengthen the zakat institution by giving our zakat to Muslim organisations who will distribute it to those who are in the 8 asnafs.

Q8) Can I give my zakat to a widow and an orphan?

Widows and orphans are not on the list of 8 asnafs.  Because some widows and orphans are not eligible to receive zakat, but they might be obligated to give zakat.  We give zakat to both categories because of their eligibility as one of the asnafs.

Q9) Can I give my zakat contribution to my mother and my wife?

It is your responsibility to provide sustenance and support to your parents and wife. Thus it is not permissible to convert your responsibility for their basic expenses (nafkah) into zakat.

Q10) My elder sister is financially unstable. Her husband is severely ill and they need financial assistance. Can I contribute my zakat to her as to ease her burden?

Yes, it is permissible (under the ‘poor’ asnaf).

Q11) My younger sister went through a divorce. She is jobless and unable to get a permanent nor part-time job to sustain herself. Can I contribute my zakat to her partially?

You are the guardian (wali) for your own sister. It is your responsibility to provide sustenance for her and take good care of her. So your contribution should be on a mandatory basis  (nafkah) and not zakat contribution.

Q12) Recently, I sold off my executive HDB flat. I received $300, 000 cash. Can you advise me on my zakat issue?

You are required to pay zakat after a year or on the date that of haul for your zakat from your savings account. Example:

Your selling transaction is settled in May 2019 and you receive the cash of $300,000 on 30th of May 2019. Your zakat will be due on 21 May 2020 during which the exact amount should be multiplied by 2.5%.

$300,000 x 2.5% = $7,500

Q13) If your selling transaction is settled in May 2019 and you receive the cash amount on 30th May 2019, but your zakat on savings is due in October 2019. You are then required to pay your zakat on the amount and add on your current savings amount.

For example:

Minimum Savings account (that meets nisab) = $30,000 (Nov 2018 – May 2019)

Cash amount from the selling of your house $300,000 (30 May 2019)

Your minimum amount within the haul (Nov 2018 – Oct 2019) is still $30,000

Your zakat is $30,000 x 2.5% = $750

Q14) I have multiple savings account. How do I calculate their zakat?

First, find out the nisab value. Next, check the saving balance for each account book. Identify the balances for each bank account in each month. Look at the total balances throughout the past 1 Islamic year (1 haul) which is 355 days. If in the past year none of your total balances have dropped below the nisab value, you are then eligible for zakat.