THE ISLAMIC SOCIAL SECURITY SYSTEM

(ZAKAT)

BY

JAMAL ABDINASIR ABDISAMED

APRIL 2024
Table of Contents
INTRODUCTION.....................................................................................................................................4
SOCIAL SECURITY SYSTEM.....................................................................................................................5
Challenges facing Social security systems..........................................................................................6
Aspects of social security systems:....................................................................................................6
Funding Mechanisms:........................................................................................................................7
Administration and Oversight:...........................................................................................................8
Examples of social security systems in the world:.............................................................................8
Zakat as a social security system.....................................................................................................10
MEANING, DEFINITION AND SIGNIFICANCE OF ZAKAT........................................................................13
Definition of Zakat:..........................................................................................................................13
Significance of Zakat:.......................................................................................................................13
Meaning of Zakat:............................................................................................................................13
TYPES OF ZAKAT..................................................................................................................................14
1. Zakat on livestock....................................................................................................................14
2. Zakat on grains.........................................................................................................................16
3. Zakat on gold and silver...........................................................................................................16
4. Zakat on commerce.................................................................................................................17
5. Zakat-ul-fitr..............................................................................................................................17
ZAKAT CONDITIONS (SHURUUD-UL-ZAKAT)........................................................................................18
What is Nisab?.................................................................................................................................18
Hawl.................................................................................................................................................20
ZAKAT’S RECIPIENTS & PAYMENT........................................................................................................21
1. The Poor and Needy................................................................................................................21
2. Employees of Zakat (Amil).......................................................................................................21
3. Those Who Integrate Hearts....................................................................................................21
4. To Free Slaves..........................................................................................................................22
5. Those with Overwhelming Debt..............................................................................................22
6. For the Cause of Allah..............................................................................................................23
7. The Traveller............................................................................................................................23
ZAKAT ADMINISTRATION.....................................................................................................................24
Reference........................................................................................................................................28

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INTRODUCTION

Man is a social animal, so he cannot live without society. Now different religions, whether,
heavenly or man-made, and all social systems came forward to teach him how to live with
peace, harmony and respect with others. Islam, among all of them, gives a complete code of
life. It deals with all aspects of an individual’s personal and social life, such as spiritual,
moral, economic, social etc. Islamic system of worship is not confined to a mere set of rituals
rather it embodies complete obedience to Almighty Allah and peaceful relations with human
beings. This fact runs like a pattern in all Islamic teachings. According to that, Zakat purifies
the giver’s soul and take him closer to Allah, while on the other, produces in him feelings of
love, brotherhood and generosity towards humanity.

Zakat (Zakaat, Zakah) is a fundamental pillar of Islam. Each Muslim must fulfil in their
lifetime if they are eligible. Therefore, it is an important duty to incorporate into the purpose
of the everyday life of a Muslim, along with the other sacred pillars. For example, Shahadah
(declaration of oneness of God), Salah (prayer), Sawm (fasting), and Hajj (pilgrimage).

Overall, it is also a revolutionary concept with the potential to ease the suffering of millions
around the world.

As Allah (SWT) tells us in the Holy Qur’an:

“Establish Prayer and dispense Zakah. Whatever good deeds you send
forth for your own good, you will find them with Allah. Surely Allah
sees all that you do.” Surah Al-Baqarah Ayah 110

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SOCIAL SECURITY SYSTEM
Social security systems are government programs designed to ensure a minimum level of
living for citizens in need. They provide financial assistance, health care, and other services
to individuals and families who are unable to support themselves due to various
circumstances, such as old age, disability, unemployment, or poverty. Social security systems
can be categorized into two main types: social insurance and public assistance.

Social Insurance

Social insurance is a system that provides benefits based on contributions made by

individuals and their employers. It covers risks such as old age, disability, and
unemployment. The benefits are typically paid out in the form of pensions, disability benefits,
and unemployment benefits

Public Assistance

Public assistance, also known as welfare, is a system that provides benefits to individuals and
families who are unable to support themselves due to poverty or other circumstances. These
benefits are typically provided in the form of cash assistance, food stamps, and other forms of
assistance to meet basic needs.

History

The concept of social security has its roots in the 19th century, when governments began to
establish programs to provide assistance to the poor and the elderly. The first modern social
security system was established in Germany in 1889, followed by similar systems in other
European countries and the United States.

Purposes

The primary purpose of social security systems is to ensure that individuals and families have
a basic level of income and access to essential services, such as health care and education,
regardless of their economic circumstances. Social security systems also help to reduce
poverty and inequality, and promote social cohesion and stability.

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Challenges facing Social security systems
Social security systems face several challenges, including:

Financial Sustainability: Many social security systems are facing financial challenges due to
demographic changes, such as an aging population, and rising health care costs.

Coverage: Social security systems often struggle to provide coverage to all individuals and
families in need, particularly in developing countries.

Inclusion: Social security systems must ensure that all individuals, regardless of their gender,
race, or ethnicity, have equal access to benefits and services.

Technology: Social security systems must adapt to new technologies, such as digital
platforms and artificial intelligence, to improve efficiency and reach more people.

Aspects of social security systems:

1. Retirement Benefits:

 One of the primary components of social security systems is retirement

benefits. These benefits provide income to individuals who have reached
retirement age and have contributed to the system during their working years.
Retirement benefits can be provided in various forms, including pensions,
annuities, or direct financial assistance.

 The age at which individuals become eligible for retirement benefits varies
from country to country. It is often linked to the official retirement age, which
may range from 60 to 70 years old, depending on the jurisdiction.

 The amount of retirement benefits individuals receive typically depends on

factors such as their earnings history, the number of years they contributed to
the system, and the specific rules of the social security program.

2. Disability Benefits:

 Social security systems also provide benefits to individuals who are unable to
work due to a disability. These benefits help replace lost income and support
individuals in meeting their basic needs.

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  Eligibility for disability benefits often requires medical documentation
demonstrating the severity and duration of the disability, as well as evidence
of inability to engage in substantial gainful activity.

3. Unemployment Benefits:

 In many countries, social security systems include provisions for

unemployment benefits to support individuals who lose their jobs
involuntarily. These benefits help tide over unemployed individuals and their
families during periods of job search or retraining.

 Eligibility for unemployment benefits typically requires individuals to have

been employed for a certain period and to have lost their job through no fault
of their own. Recipients may also be required to actively seek employment
and report their job search activities to continue receiving benefits.

4. Survivor Benefits:

 Social security systems often provide benefits to the surviving family

members of deceased workers, including spouses, children, or dependent
parents. These survivor benefits help mitigate the financial impact of the loss
of a primary breadwinner.

 Eligibility for survivor benefits may depend on factors such as the deceased
worker's earnings record, the survivor's relationship to the deceased, and
whether the survivor meets certain age or disability criteria.

5. Healthcare Benefits:

 Some social security systems include provisions for healthcare benefits, either
as part of the overall program or through separate healthcare initiatives. These
benefits may include coverage for medical expenses, prescription drugs,
preventive care, and hospitalization.

Funding Mechanisms:
Social security systems are typically funded through a combination of contributions from
workers, employers, and sometimes the government. These contributions may be made
through payroll taxes, income taxes, or dedicated social security funds.

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Administration and Oversight:
Social security systems are administered by government agencies responsible for managing
program enrollment, collecting contributions, determining eligibility, and disbursing benefits.

These agencies often work in coordination with other government departments, such as labor
ministries, health departments, or finance ministries, to ensure the effective operation and
oversight of social security programs.

Examples of social security systems in the world:

Social security systems vary significantly from one country to another in terms of their
structure, coverage, benefits, and funding mechanisms. Here's an overview of social security
systems in different parts of the world:

1. United States:

 The United States has a complex social security system administered by the
Social Security Administration (SSA). It provides retirement, disability, and
survivor benefits to eligible individuals based on their work history and
contributions to the Social Security Trust Fund through payroll taxes.

 The system also includes Medicare, a federal health insurance program

primarily for people aged 65 and older, and Medicaid, a joint federal and state
program that provides health coverage to low-income individuals and families.

2. United Kingdom:

 The United Kingdom operates a social security system that includes various
benefits and allowances administered by the Department for Work and
Pensions (DWP). These benefits include the State Pension, Jobseeker's
Allowance, Employment and Support Allowance, Housing Benefit, and Child
Benefit, among others.

 The UK also has a National Health Service (NHS), which provides healthcare
services to residents free at the point of use, funded through general taxation.

3. Canada:

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  Canada's social security system includes the Canada Pension Plan (CPP) and
Old Age Security (OAS) program, which provide retirement benefits to
eligible individuals. Additionally, Canada offers Employment Insurance (EI)
to provide temporary financial assistance to unemployed workers.

 Healthcare in Canada is primarily publicly funded and delivered through a

publicly funded healthcare system known as Medicare, which provides
coverage for medically necessary hospital and physician services.

4. Germany:

 Germany has a social insurance system that provides various benefits,

including retirement, disability, health, and long-term care insurance. These
programs are funded through contributions from employees, employers, and
the government.

 The German healthcare system is characterized by mandatory health insurance

coverage for all residents, provided through either statutory health insurance
(SHI) or private health insurance (PHI).

5. Sweden:

 Sweden has a comprehensive social security system that includes various

benefits such as old-age pensions, sickness benefits, parental benefits, and
unemployment benefits. These benefits are financed through taxation and
administered by government agencies.

 The Swedish healthcare system is primarily publicly funded and decentralized,

with responsibility shared between the central government and regional
authorities. Healthcare services are provided to residents at minimal cost.

6. Japan:

 Japan's social security system includes public pension programs, health

insurance, and long-term care insurance. The public pension system provides
benefits to retirees, survivors, and people with disabilities, funded through
contributions from employers, employees, and the government.

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  Healthcare in Japan is provided through a combination of public health
insurance programs, including the National Health Insurance (NHI) system
and the Employees' Health Insurance (EHI) system.

These examples illustrate the diversity of social security systems around the world, each
tailored to the specific needs, priorities, and socioeconomic conditions of their respective
countries. While there are common elements such as retirement and healthcare benefits, the
details and implementation vary significantly depending on national policies and institutions.

Zakat as a social security system

Zakat is an Islamic concept that refers to the obligation of Muslims to donate a fixed portion
of their wealth to the needy and poor. It is considered a form of social security in Islamic
societies, as it provides financial assistance to those in need and helps to reduce poverty and
inequality.

Zakat has a long history in Islamic societies, dating back to the time of the Prophet
Muhammad (peace be upon him) in the 7th century. It was established as a means of
redistributing wealth and ensuring that everyone in the community had access to basic
necessities. The concept of Zakat is deeply rooted in Islamic teachings, which emphasize the
importance of social justice, compassion, and generosity.

Zakat is considered a religious obligation, and it is one of the Five Pillars of Islam. Muslims
are required to pay Zakat on their wealth, including savings, investments, and business
profits. The amount of Zakat that must be paid is calculated based on the value of the
individual's wealth and the length of time it has been held.

In addition to its role as a social security system, Zakat also serves as a means of spiritual
purification for the individual. By donating a portion of their wealth to the needy, Muslims
are able to purify their hearts and souls, and draw closer to God.

Despite its long history and central role in Islamic society, Zakat has faced challenges in
modern times. In some countries, the collection and distribution of Zakat is not well-
organized, and many Muslims are unaware of their obligations. In addition, some

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governments have been criticized for not doing enough to support the implementation of
Zakat.

Despite these challenges, Zakat remains an important part of Islamic culture and tradition. It
is a unique form of social welfare that benefits the entire community, and it serves as a
powerful reminder of the importance of compassion, generosity, and social justice in Islamic
societies.

Zakat represents a social security system in several ways:

1. Redistribution of Wealth: Zakat serves as a mechanism for redistributing wealth

within society. It requires Muslims who meet certain criteria of wealth (such as
owning assets above a specified threshold) to give a portion of their wealth to those in
need. By doing so, Zakat helps address economic disparities and ensures a more
equitable distribution of resources.

2. Support for the Needy: Zakat primarily benefits the less fortunate members of
society, including the poor, needy, orphans, widows, and those in debt. It provides
them with financial assistance to meet their basic needs, such as food, shelter,
clothing, education, and healthcare. In this way, Zakat acts as a safety net for
vulnerable individuals and families, akin to social security programs.

3. Community Solidarity: Zakat fosters a sense of community solidarity and cohesion

by encouraging Muslims to care for one another. It emphasizes the importance of
compassion, empathy, and social responsibility in Islam, promoting a collective
obligation to support those in need. By contributing to Zakat, individuals strengthen
the bonds of brotherhood and sisterhood within the Muslim community.

4. Prevention of Poverty: By providing financial assistance to the needy, Zakat helps

prevent poverty and destitution from escalating within society. It offers a means of
support for individuals and families facing temporary hardships or crises, helping
them avoid falling into a cycle of poverty. Moreover, Zakat can empower recipients to
become self-sufficient by investing in income-generating activities or acquiring
necessary resources.

5. Promotion of Social Justice: Zakat embodies the principles of social justice and
fairness in Islam. It emphasizes the duty of the wealthy to share their blessings with
those less fortunate and to contribute to the welfare of the entire community. Through

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 Zakat, wealth is not only seen as a personal possession but also as a trust from Allah
to be used for the betterment of society as a whole.

6. Voluntary Contributions: While Zakat is obligatory for eligible Muslims, additional

voluntary charity, known as Sadaqah, further supplements the social security aspect of
the system. Sadaqah allows individuals to contribute beyond their Zakat obligations,
providing additional support to those in need and reinforcing the communal spirit of
giving.

Overall, Zakat represents a unique form of social security system rooted in Islamic principles
of compassion, justice, and communal responsibility. It addresses economic inequality,
supports the marginalized, and fosters solidarity within the Muslim community, serving as a
vital mechanism for promoting social welfare and stability as Allah said in the Qur’an:

‫َك ْي اَل َيُك وَن ُد وَلًة َبْيَن اَأْلْغ ِنَياِء ِم نُك ْم‬

“This distribution system is to ensure) that (the whole wealth) may not circulate (only)
amongst the rich of you (but should circulate amongst all the classes of society)”.

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MEANING, DEFINITION AND SIGNIFICANCE OF ZAKAT

Zakat is one of the five pillars of Islam and is considered a fundamental aspect of the Muslim
faith. It is a mandatory charity that requires Muslims to donate a fixed portion of their wealth
to the needy and poor. The word "Zakat" is derived from the Arabic word "Tazkiyah," which
means purification. Therefore, Zakat is seen as a means of purifying one's wealth and soul.

Definition of Zakat:
Zakat is a religious obligation for all Muslims who meet the necessary criteria of wealth. It is
a fixed percentage of a Muslim's total wealth that must be given to the needy and poor. The
percentage of Zakat varies depending on the type of assets owned, but it is typically around
2.5% of a person's total wealth.

Significance of Zakat:
Zakat has several significant meanings and benefits in Islam.

1. Purification of Wealth: Zakat is seen as a means of purifying one's wealth by giving a

portion of it to those in need. This act of charity helps to remind Muslims that their
wealth is a blessing from Allah, and it should be used to help others.

2. Social Justice: Zakat is an essential tool for promoting social justice and reducing
poverty. It helps to redistribute wealth and provide for those who are less fortunate.

3. Spiritual Growth: Zakat is also seen as a means of spiritual growth. By giving to

others, Muslims can develop a sense of empathy, compassion, and generosity.

4. Obligation to Allah: Zakat is a mandatory obligation to Allah. Muslims believe that

they are accountable to Allah for their wealth and must give a portion of it to those in
need.

5. Unity and Solidarity: Zakat promotes unity and solidarity among Muslims. It
encourages Muslims to help one another and work together to build a better
community.

Meaning of Zakat:
The meaning of Zakat goes beyond just a mandatory charity. It is a way of life for Muslims
that promotes social justice, spiritual growth, and unity. By giving to others, Muslims can

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purify their wealth, fulfill their religious obligations, and develop a sense of compassion and
generosity. Zakat is a reminder that all wealth comes from Allah, and it should be used to
help those in need.

In conclusion, Zakat is a fundamental aspect of the Muslim faith that has significant
meanings and benefits. It is a mandatory charity that requires Muslims to donate a fixed
portion of their wealth to the needy and poor. Zakat promotes social justice, spiritual growth,
unity, and solidarity among Muslims. It is a way of life that reminds Muslims of their
obligations to Allah and their responsibility to help those in need.

TYPES OF ZAKAT

1. Zakat on livestock
Livestock includes quadrupeds, such as camels, cows, and sheep, but not horses and donkeys,
among others.

Also, there are four pre-conditions to zakat on livestock:

1. Firstly, the quadrupeds must be the sort that are nurtured at a farm, not at home, so
that the costs are lower. If the livestock has been raised and fed year-round at home,
and the owner considers it a cost, then the zakat due will decrease.

2. Secondly, the livestock must be under their possession for at least a year, and if the
livestock does not remain within their ownership, the zakat will fall. However, the
offspring of possessed livestock, even if they are born towards the culmination of the
year, must be taken into account. And zakat remains obligatory on them.

3. Thirdly, the possessor of livestock must have mastery over them, in the sense that
they remain under his control. Therefore, if a quadruped is lost or an oppressive ruler
seizes their possession, the owner is not obligated to pay zakat, unless the benefits
accruing from the livestock have reached the owner. In the latter case, it becomes

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 obligatory to pay zakat. Also, owners of livestock that are indebted are exempt from
paying zakat, for they are destitute in actuality.

4. Fourthly, the magnitude of livestock must be such that one can manage to pay zakat,
which means that zakat on a low sum of livestock is not recommended.

In regard to camels, know that unless one possesses a total of five, payment of zakat does not
apply. In exchange for a batch of five camels, one must give a single sheep in zakat; for a
group of ten camels, two sheep; for a batch of fifteen camels, three sheep; and, for a set of
twenty camels, four sheep. The sheep must be aged no less than a year old, and if one wishes
to offer goats, they must be of two years, at least.

When the camel stock reaches twenty-five, a year-old female camel becomes obligatory in
zakat payment. However, if the owner lacks a female camel, a two-year old male camel will
suffice in its stead. Thenceforth, zakat is not obligated until the stock reaches thirty-six in
number. Upon reaching that threshold, it becomes obligatory to offer a two-year-old female
camel in zakat. When the camel-stock numbers at forty-six, a single three-year-old female
camel must be offered. Likewise, for a stock of sixty-one, a single four-year-old female
camel; for a herd of seventy-six, two male camels aged two; for a group of ninety-one
camels, two three-year-old male camels; and, in exchange for a total of one-hundred-and-
twenty-one camels, three male camels aged two years must be given in zakat.

Beyond this threshold, the calculation must be conducted as follows: for every additional fifty
camels, a female camel of three years; and for every extra forty camels added to the stock, a
male camel of two years.

In relation to cows, moreover, unless one’s stock reaches thirty in total, zakat remains
inapplicable. Beyond a stock of thirty cows, a single one-year-old cow becomes obligatory in
zakat payment; at a threshold of forty, a single two-year-old cow; at sixty, two one-year-old
cows. Thereon, the ruling is that for an extra batch of forty cows, one must offer a two-year
old cow, whereas a batch of thirty cows requires a one-year-old cow as zakat payment. In
regard to sheep, additionally, know that in exchange for a stock of forty, one must offer one
in zakat. Upon reaching a threshold of one-hundred-and-twenty-one, the owner must offer
two sheep, and a zakat payment of three sheep when the stock reaches two-hundred-and-one.
Moreover, a stock of four-hundred sheep requires four sheep as zakat payment. Beyond this
threshold, the accounting is as follows: for every additional one-hundred batch, a single sheep
of one-year-old if female or two-year-old if male.

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Furthermore, if two people co-own the stock, provided that one of the two is not a disbeliever
or a self-ransomed slave (mukatib), it will be treated as a single stock. Until the owners have
not obtained a combined stock of forty sheep, each is obligated to offer half a sheep in zakat.
However, once the combined stock of sheep reaches hundred-and-twenty, then, a single
sheep suffices as zakat.

2. Zakat on grains /crops

Whosoever possesses eight hundred mound (653kg) of wheat, barley, raisins, or dates, or any
other harvest that can nourish a collective and with which the group can make do, such as
rice, pulses, and beans, among others, then a payment worth one-tenth (ʿashar) of the produce
is obligatory.

However, if the produce does not comprise a source of nutrition, for example, cotton, nuts,
and linen, among others, then the one-tenth ruling does not apply. Besides, if the produce
consists of four hundred mound of wheat and barley each, then a one-tenth payment does not
apply, since zakat applies to a single form of principal. Also, if the water for grains does not
stem from a stream or subterraneous canal, but is taken from a well, no more than a payment
of one-twentieth applies.

The zakat must be paid in raisins and dried dates, rather than fresh grapes and dates, although
if the grapes are of a sort that cannot be changed into raisins, then fresh grapes are accepted,
too. Once the colour of grapes turns or the grains harden, the owner must estimate the share
to be paid in zakat, rather than take the produce in possession, in order to know how much
will be offered to the destitute.

Having determined and accepted this estimation, it becomes acceptable to bring the rest of
the harvest under ownership.

3. Zakat on gold and silver

To a minimum reserve of two-hundred silver coins, an obligatory zakat payment of five coin
applies at the end of the year. And if the total stock of gold coins numbers twenty, half or
one-fortieth of a coin must be paid in zakat.

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The proportion of half-coin to twenty coins of gold applies onward as the reserve expands.
Besides, it is obligatory to pay zakat on any item that contains silver and gold, from
household utensils and swords to ink-holders and pen cases, among others. However, zakat
does not apply on gold and silver that is appropriate for a woman or man to possess, such as
jewellery.

Nonetheless, if one has entrusted gold and silver to others, then, the owner must pay zakat
upon receiving them.

4. Zakat on commerce
If one has procured twenty gold coins with the intention of starting a trade, and the year
comes to an end, then zakat must be paid on the gold and whatever profits were made in that
period.

Towards the end of each year, one must compute the amount of wealth under their
ownership. If the capital was bought with gold or silver, it is advisable to pay zakat in those
metals, although if the purchase was made using ready cash, then one may pay in whatever
coinage stands dominant in the city.

Moreover, where one possesses merchandise with the intention to engage in commerce, the
mere intention of doing so does not create an obligation to pay zakat. Indeed, where the
person chooses to eschew mid-way the intention to engage in commerce altogether, the
obligatory zakat due will diminish.

Yet, where a person begins with ready cash or a requisite threshold of principal rather than
merchandise when intending to trade, the yearly period of zakat will begin from the day one
comes to own the cash or principal.

5. Zakat-ul-fitr
Every Muslim in possession of goods in excess of that required for their sustenance during
the festival of Eid, with the exemption of residence, clothes, and other essentials, acquires an

obligation to offer a ṣāʿ (four double handfuls) of food grain in payment (zakat al-fiṭr).

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If a household consumes wheat, then barley will suffice as donation. However, if one
consumes myriad grains and vegetables, then only the best of foods must be offered, and al-
Shāfiʿī ؒ maintains that flour cannot be donated as a substitute for wheat.

Moreover, the zakat must be made on behalf of one’s dependents, such as their mother,
father, children, and slaves. And if a slave is owned in common, then both owners are
obligated to pay zakat on his or her behalf. Importantly, zakat does not apply on non-Muslim
slaves.

In addition, whether the wife personally pays their zakat, or the husband pays on her behalf,
both are accepted.

This amount of knowledge on zakat is necessitous for all believers to possess; for other
inquiries, one must consult the scholars.

ZAKAT CONDITIONS (SHURUUD-UL-ZAKAT)

Conditions for the obligation of zakat include:
1- Islam (faith)
2- Freedom, zakat is not obligatory on the slave
3- The money must be lawful
4- Ownership and reaching the Nisab, which varies according to the types of funds (Mal)
5- Complete Hawl
6- The Nisab of money is in excess of the Muslim’s basic need for living
7- Complete ownership of money.
8- Growth, money can grow.
9- There is no debt on zakat money

What is Nisab?
We use the Nisab for calculating Zakat each year, and to determine whether or not one is
obligated to pay Zakat that year.

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Nisab is the minimum amount that a Muslim must own before they are obliged to pay Zakat.
This means that not everybody is obligated to pay Zakat, thus ensuring that only those for
whom payment is easy, are given this responsibility.

Zakat is a small proportion of one’s wealth – just 2.5% – and is only payable by those who
can afford to do so. This is determined by the value of the Nisab. We use the Nisab for
calculating Zakat, as it tells us both whether or not our financial state makes us a payer of
Zakat, and helps us determine exactly how much we should pay. As Zakat is a percentage of
wealth, it is not the same for all individuals, and will naturally mean that those with more
wealth will pay a higher amount of Zakat, but still just 2.5% of their wealth.

How much is the Nisab?

The Nisab was ordained by Prophet Muhammad (peace be upon him) at a rate equivalent to
87.48 grams of gold and 612.36 grams of silver.

At the time of our Prophet (saw), silver and gold were used as currency, but now we must
convert this to figures we use and understand with our own currencies and markets. This is
done by checking the market value for gold and silver. It is important to remember that the
market value of gold and silver varies from country to country, thus meaning that the Nisab
value is not the same for all households around the world. It is also important to remember
that the value of silver and gold will change throughout the year, and so you will need to
check the value before calculating your Zakat and seeing if your wealth exceeds that of the
Nisab.

To use the Nisab for calculating Zakat, we must determine what the current values are.

Nisab Value (as of April 2024):

Using value of silver (612.36 grams) – approximately $565.83

Using value of gold (87.48 grams) – approximately $6,645.54

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Should we use silver or gold when using the Nisab for calculating Zakat?

According to the Hanafi school of thought and many scholars, the value of silver should be
used when determining the value of the Nisab and whether somebody is eligible to pay Zakat.
Other schools of thought believe that the value of gold should be used.

The value of silver is significantly lower than the value of gold, and so this means that more
people are eligible to pay Zakat using this value for the Nisab. When more people are eligible
to pay Zakat, it means that more vulnerable people around the world can be supported, and
we can do more as an ummah to tackle global poverty and suffering.

Why is it so important to use the Nisab for calculating Zakat?

While Zakat is a beautiful act of devotion to Allah (swt), it is an obligation for which there
are a series of rules and conditions that must be fulfilled. The first of these is to determine
whether somebody is required to pay Zakat, or not. If somebody does not have wealth that
reaches the value of the Nisab, it is likely that their financial situation is strained. As Islam is
a religion of ease and peace, Allah (swt) tells us that no soul will be burdened more than they
can bear, and this is one of the ways that Allah demonstrates this to us.

If somebody is not required to pay Zakat, they are still free to give Sadaqah in any form,
which will be rewarded by Allah (swt). Giving money to charity and to those in need is the
main form of Sadaqah, but Prophet Muhammad (saw) told us that other things also count as
Sadaqah. This includes smiling at your brother; removing something harmful from the road;
visiting those who are unwell; giving and returning salaam; teaching somebody something,
and making duaa for others.

Prophet Muhammad (saw) said:

“Every good deed is charity. Verily, it is a good deed to meet your brother with
a cheerful face, and to pour what is left from your bucket into the vessel of
your brother.” [Tirimidhi]

Hawl
‘Hawl’. This means a lunar year, which is 354 days long. Zakat payments are due one hawl
(lunar year) after you become eligible to pay Zakat and have thus had in your possession
wealth that is equivalent to the nisab.

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It is important to note that you must have had wealth that is equivalent to, or exceeds, the
nisab, for the entire hawl (lunar year) and on the date one year on. If not, your hawl begins
again on the day that your wealth reaches the threshold of Nisab.

ZAKAT’S RECIPIENTS & PAYMENT

there are eight categories of people (asnaf) who qualify to benefit from zakat, they include:

1. The Poor and Needy

The first and second of the eight recipients of Zakat are the poor and the needy. Therefore,
the amount of Zakat will be given to the poor and the needy first. Prophet Muhammad
(SAW) ordered the Governor of Yemen to collect and distribute Zakat: “Zakat should be
taken from the rich Muslims and distributed among the poor.” (Sahih Al Bukhari:1395)

2. Employees of Zakat (Amil)

The third recipient of Zakat is the employees of zakat. They are the workers of the
institution of Zakat. i.e, those who collect Zakat and do the work of reckoning, etc. Those
are the people who have been appointed by the government to collect Zakat. They collect
zakat from the wealthy class and distribute it among those who are entitled to zakat and
keep an account of zakat. Therefore, they will be paid from the amount of Zakat, not as a
grant or Zakat. Rather, it will be given as a reward and service.

3. Those Who Integrate Hearts

It is the fourth recipient of Zakat. The recipients of this category are those who support is
sought and expected or those who can influence others for the welfare of Islam. It is the
only category in which there is the possibility of giving a portion to non-Muslims. The
commentators and the jurists have different opinions on this issue. According to one
group of jurists, it also includes two groups of non-Muslims:

a) Those who hope to be influenced by financial support will convert to Islam

b) Leaders and powerful people who can be helped to keep them quiet.

Some jurists have also mentioned two groups of Muslims:

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 a) People living on the border of a Muslim country, so that they stay in their place and do
not leave the border and come to the city; because at that time there were no paid soldiers
to protect the country, everyone volunteered to serve the country's defence. Therefore, the
border populations were of great importance and they were a defensive line. Obviously,
this is no longer the case because the regular army is now deployed on the borders.

b) Those new Muslims who are likely to have maturity and steadfastness in their faith due
to financial support. Also, seeing their better condition, people belonging to their society
will be encouraged to convert to Islam.

4. To Free Slaves
The Qur'an describes the fifth recipient of Zakat with the word "wa fil-raqab" which
means "neck”. If someone's neck is stuck, he should be released. This is an Arabic term
and it means 'slave', which means to help a slave to free himself. Or buy them and set
them free. Islam basically does not believe in enslaving human beings; but in the time
when the Prophet (SAW, it was not possible to end slavery immediately. Therefore, the
Holy Prophet encouraged the freeing of slaves and took various measures to pave the way
for the liberation of slaves. Therefore, the Prophet (SAW) used to urge Muslims to help
the slaves who needed money to be freed.

5. Those with Overwhelming Debt

The sixth recipient of Zakat is "Gharmin". Gharmin refers to those debtors who are not
able to repay the loan, and the lenders are not willing to forgive the debt. It is narrated
from Hazrat Abu Saeed Al-Khudri that in the time of the Prophet (SAW) the harvest of a
person's fruit was affected and the debt became very high. So the companions gave him
alms:

The Messenger of Allah (Saw), said, "Give charity to him, and people give charity to
him." (Ibn Majah, Al-Sunan: 2446)

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 6. For the Cause of Allah
The seventh recipient is "fii Sabeelillah", meaning for the sake of Allah. It means those
who strive in the way of Allah. its meaning is general refers to Mujahideen. There is no
specific source of this expenditure in Muslim countries today, but the Mujahideen who
are at war with the infidels, such as the Muslims of Kashmir, Palestine, Burma and
Afghanistan, can be helped in this regard. But great care is needed in this regard so that
the Zakat money is not used in terrorist activities.

7. The Traveller
The eighth recipient of Zakat is 'Passenger', also called 'Ibn Sabeel' in Arabic and the
Qur'an has also used the same word for them under the recipients of Zakat. The traveller
is rich or poor. If he is in need, he can be given Zakat. Even if a person is rich in his
homeland but if a situation aroused that he lasts all his money during journey then he will
be considered a needy.

Choice of Category and Priority

The above-mentioned recipients in whom the amount of Zakat can be spent are the legal
recipients of Zakat. But there are some preferential recipients, of which religious
madrassas and religious institutions have been mentioned first.

The second preferred recipient is relatives. In the case of relatives, it should be

remembered that Zakat cannot be paid if there is a lineage of parents, grandparents and
above them, as well as children, grandchildren and below them. Zakat cannot be paid to a
family, nor can husband and wife pay Zakat to each other. Apart from them, Zakat can be
paid to all other relatives, such as brother, sister, uncle, aunt, mother-in-law, father-in-
law, brother-in-law and sister-in-law, etc. There is a double reward in giving them Zakat.
One: to pay Zakat, the other: to fulfill the requirement of a kind-hearted reward, this
ruling is not only for Zakat; rather, it is for all alms, but it does not mean that the entire
Zakat should be given to one's relatives. Instead, try to spend on all the expenses that are
available. However, special importance should be given to the deserving Zakat relatives.
The third priority may be the neighbours, In this regard, there is probably no guidance
from the Prophet Muhammad (SAW), but in general, kindness to one's neighbours is

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 commanded, and one form of kindness may be aided by zakat. That is why neighbours
should be remembered in Zakat. Some people insist that the zakat of one city should be
spent in that city and not in another This is the result of ignorance of religion and
deprivation of the universal spirit of Islam. There are many madrassas and religious and
national works in Muslim countries, whose needs are met with the help of foreign
countries, and this cooperation comes legally, then in the big cities of the Muslim
countries, the wealthy Muslims, traders and industrialists pay Zakat on a large scale and
the religious activities of the whole country get their food from there. If the people of
every region limit their cooperation to their city, then the religious and economic needs of
a country's poorest population cannot be met because most of the poor and needy live in
rural areas.

ZAKAT ADMINISTRATION
Did Zakat Have Administrators Historically?

Yes. The Prophet œ, himself, was the first Zakat administrator. He appointed Zakat collectors
in every region in which people accepted Islam. Moreover, the Quran established charitable
giving deep in the hearts of its community and fixed it into the very foundations of the
religious way of life and sacred civilization. God Himself revealed the rules of Zakat and the
deeply spiritual principles and etiquette of dispensing charity. The Prophet epitomized and
characterized these standards in his life, demonstrating the exquisitely sensitive and refined
manners one is to exhibit when paying alms and in benevolent giving. The Prophet inculcated
these behaviours and attitudes in his Zakat collectors—whom he chose to begin with because
of their integrity, nobility, and gentleness.

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Who Is Authorized to Accept Zakat?

Individuals pay Zakat (including corporations). Its collection and distribution, however, is a
function of:

(a) an Islamic polity/state, if one exists, or

(b) the Muslim community, if it lives independent of an Islamic polity, which is by far the
case with Muslims outside the traditional lands of Islam.

Indeed, the reality is that most Muslims independently determine where to place their Zakat.
Late in the lives of the illustrious first generation, even after the rule of the Rightly Guided
Caliphs lapsed, prominent Companions—including A’isha, Ibn Umar, Said ibn Abî Waqqas,
Abu Hurayrah, and Abu Said Al-Khudri—continued to pay their Zakat to the government and
commended others to do the same.

Is Zakat Collection and Distribution Centralized?

As we have seen in previous examples, historically Zakat was collected from the wealthy
residents of a locality and distributed to the poor and needy in that same locality. Excess
Zakat was sent on to the central Bayt al-mal (treasury), usually after local disbursement had
been thoroughly exhausted. In the time of the first Caliph, Abu Bakr, for example, he
appointed Umar ibn Al-Khadaab as Zakat administrator, who directed the residents of the
great cities of Kufah, Basrah, and Damascus to select their most trustworthy countrymen as
Zakat collectors.

What Are the Stipulations and Desirable Qualities of the Zakat Collector?

Zakat collectors must meet a minimum of ten criteria:

1. They must be Muslim.

2. They must be sane.

3. They must be past the age of puberty.

4. They must be trustworthy.

5. They must be righteous and honest.

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6. They must be efficient and capable.

7. They must not accept any gifts from Zakat payers or recipients, all such gifts being
considered bribes.

8. They must declare everything they collect and put it in the Zakat fund, misappropriating
nothing, designating all Zakat as its payers have instructed.

9. They must be kind, courteous, and moderate with those whom they collect from, the
people of means.

10. They should pray for the wellbeing of those they collect Zakat from.

Who Administers Zakat Nowadays?

Zakat collection is the obligation of Muslim polities, and specifically the Muslim
government of an Islamic society. If there is no such entity to carry forth the communal
obligation of Zakat collection and distribution among Muslims, then the Muslims of each
locality or region must create an independent Zakat agency to facilitate and manage this
individually and communally obligatory worship. Only the most trustworthy and
professionally qualified Muslims from each community, locality, or region should administer
the collection and distribution of Zakat funds. Moreover, in our times it is necessary also that
these individuals:

(1) create and oversee programs to educate Muslims about the importance of paying Zakat as
the Third Pillar of Islam;

(2) that they design effective and detailed plans that optimize local collection and distribution
sequences; and

(3) that they work with other Zakat agencies to create a collective Zakat repository to
aggregate all local and regional Zakat overflows.

What If No Such Agencies Exist in a Particular Area?

Zakat is an individual obligation that must be paid to the poor and eligible. In the absence of
a legitimate, Islamic governing authority to organize Zakat collection and distribution, or of
established communal agencies to take on this religious responsibility, the individual Zakat

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payer bears full responsibility. He or she must learn how to determine one’s zakatable wealth,
assess one’s own Zakat, and seek qualified Zakat recipients, in accordance with the
specifying verses of the Quran and the exemplifying practices, teachings, and approvals
(Sunnah) of the Prophet œ. These individuals are then responsible for directly paying entitled
recipients their rightful due from one’s wealth. Whether one asks for Zakat or not, it is
absolutely clear in the Quran that the poor and the needy (followed by others who are
eligible) must be paid their due from, and supported by, Zakat under any circumstances.

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Reference

Abel-Smith, B. (2024). social security. Encyclopedia Britannica.

America, Z. F. (2008). The Zakat Handbook: A Practical Guide for Muslims in the West. AuthorHouse.

Anna Carolina Machado, C. B. (2018). The role of zakat in the provision of social protection.
International Policy Centre for Inclusive Growth (IPC-IG).

Jonathan Gruber, K. M. (2009). Social Security Programs and Retirement Around the World. National
Bureau of Economic Research.

Kahf, M. (1987). The early Islamic public revenue system: Lessons and implications. Jeddah. IRTI.

Nasir, M. &. (2020). Analysis of the Recipients of Zakat and the Current Situation. Indonesian
Conference of Zakat.

Qutub, S. (2000). Social justice in Islam. [Adalah al-ijtimaiyah fi al-Islam]. Islamic Publications
International.

(n.d.). Retrieved from https://www.goldgrambars.com/

(n.d.). Retrieved from https://www.silvergrambars.com/

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