With Ramadan underway, charity is very much on the mind of Muslims observing the month-long fast.
Zakat is the charitable donation that Muslims give away each year, functioning as an obligatory tithe for eligible members of the faith.
As one of the Five Pillars it’s an essential part of Islam, and is a form of worship.
The amount based on nisab values – the threshold that an individual needs to earn before needed to donate.
The threshold is based on the price of gold or silver, which change often.
As the values fluctuate, it’s important for Muslims to calculate Zakat each lunar year.
How to calculate Zakat 2021?
Zakat should amount to 2.5% of your total wealth accumulated over the year, although there are some exceptions.
When calculating Zakat, you need to bear in mind the nisab value in 2021. They are:
- Silver – 612.36g equating to £275.01
- Gold – 87.48g equating to £3983.93
Your overall wealth must meet or exceed the nisab value in order for you to be eligible.
You pay Zakat on the below items, subtracting any debt you may have:
- The value of gold and silver items owned
- Money in your bank accounts or cash at home
- Loans that you have given out
- Pensions, stocks, shares and investments
- Property owned as an investment (excluding the property you live in)
- Farm and agricultural produce.
Who can receive Zakat?
According to the Quran, the below groups are eligible for Zakat:
- The poor
- The needy
- Travellers in need
- Those in debt
- Those being held against their will or in slavery
- New Muslims and friends of the Islamic community
- Those in the cause of Allah
- Administrators of Zakat