A Comprehensive Guide to Calculating Your Zakat
Are you looking to calculate Zakat Al Mal but not sure where to start? As a Muslim, fulfilling the obligation of Zakat is not only a religious duty but also a means of purifying one’s wealth and benefiting the wider community. In this comprehensive guide, we will take you through the process of calculating Zakat Al Mal, along with some helpful tips and examples.
Calculating Your Zakat Al Mal – Should You Use Gold or Silver To Calculate?
Zakat al Mal, a mandatory contribution, is traditionally 2.5% of your excess wealth. There is a base amount that is set aside for daily expenses, before making your calculations. This is equivalent to 1 Nisab of gold (85g) or 1 Nisab of silver (612g). As our economy has grown beyond the use of gold and silver in day-to-day finances, the equivalent cash value can be researched online. This price can fluctuate, so it’s best practice to find the true value whilst you are calculating your Zakat donation online.
There are competing ideas on which value is best to use when calculating your Zakat – gold or silver. Gold always has a higher value than that of silver. With the cost of living increasing daily, some argue that those making their Zakat donation in Australia should use the more favourable gold value. This allows people to retain more of their wealth and have a smaller excess. This school of thought has many supporters due to the financial strain of recent economic changes.
However, many people still believe that the silver value should be used. This is because it allows a more generous and charitable donation. With Zakrat set at a mere 2.5% of excess wealth, it will pay far more in blessings, both here and in the next life, to use the value that looks more favourably on those who are in need.
Calculating Your Zakat Donation Online
Choosing between gold and silver in your calculation is a private choice and one you alone can make. It will depend on your current circumstances. Consider how much excess wealth you have and how much you need to cover the necessities for you and your family.
Once you know the gold/silver value you are using, you can calculate the total value of your assets. This doesn’t just include cash. It includes precious metals, stocks, shares, debts owed to you and investment properties. Anything that has the possibility of generating some income is considered. It may even extend to include the value of any livestock, depending on the school of thought you ascribe to.
Note that, as they are a basic necessity and required for your daily life, homes, cars, food, furniture and clothes, are often not counted as excess wealth for Zakat donation. However, some do count them and the choice remains yours.
Next, calculate your expenses. This includes daily living expenses, business outgoings and debts you owe.
And to help make your Zakat donation online easier, Penny Appeal Australia has a simple-to-use calculator, ready for you to insert these figures. In just a few clicks you’ll be shown the value of your Zakat.
Spreading Your Zakat Payment
Though Zakat is paid every year, life situations can arise unexpectedly that cause a financial upset. And when Zakat is due, it might cause you and your family increased difficulties to pay your dues all at once. In this instance, it is possible to spread the payment of your Zakat donation online throughout the year. You can set up a monthly direct debit to make your charitable donation and pay your Zakat over time.
To find out what your Zakat is, take the time to calculate your income, expenses and the gold/silver value you’ll use. Use the Penny Appeal Australia Zakat online calculator to determine 2.5% of your excess wealth. Remember, it is for the benefit of desperate, suffering souls and you will be rewarded for your kindness.