A GUIDE TO

ZAKAT ACCOUNTING

Prepared by
Dr. Hussain Hussain Shehatah
Al-Azhar University
1/25/15

1/25/15

In the Name of Allah,

The Most Merciful,The
Most Compassionate

Zakat in The Holy Quran

:

...
( :
43 )
Allah says : and be steadfast in prayer
,practice regular Zakat and Bow down
Your heads with those who down ..
( Al-Baqara- 43 )
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Zakat in THe Sunnah

:
,
, ,
, ,
,
(
)
4

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Zakat in Sunnah-cont.
The Messenger of Allah( peace be upon Him
) said : Islam has been built on five
pillars , Testifying that there is no God but
Allah and Mohammed is the messenger
of Allah, performing the prayers, paying
the Zakat, making, the pilgrimage to the
house of Allah , and fasting Ramadan
( Buhkary and Muslim )

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Chapter One

Zakat Rules
(Zakat Fiqh)

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Zakat Meaning
Zakat means , in
Language , : Blessing, Purity,
Growth and Uprightness .
It means in Shariah :a
defined allocating amount
from a defined money for an
assigned people .
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Zakat and Sadaqa

Zakat may called Sadaqa , Allah says
: of their properties ( money) take
Sadaqa , that may Purify and sanctify
them and pray on there behalf..


* -The Word Sadaqah in this verse
refers to Zakat . But it sometimes refers
to Charity .

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*-Accordingly , every Zakat

is a Sadaqa
And a Sadaqa may be a
Zakah or a Charity .

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Zakat Rules

Muslim Scholars have summarized

Zakat Rules as follow :
- Zakat is a Farida from Allah (obligatory ).
- Zakat is a Financial Worship .
- Zakat is a Believe .
- Zakat is Compulsory to Muslims.
- Zakat is Due to an assigned Receivers.

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- Zakat is Annuity , except Zakat on Plants

and Fruits , and on Rakaz .
- No Zakat until Wealth exceeds Nisab
- No Duality in Zakat.
- Zakat affairs are the Responsibility
of Government.

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- Due

Zakat does not obsolete .

- Zakat is Obligatory to Muslims any
where in the world.

-The Muslim who denies the Obligatory

of Zakat is a Non-believer ( Kafir) ,

and who refuses to pay it , is a

Disobeyer.

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Zakat and Tax

Differences
-Zakat is a financial Worship ,and a pillar
of Islamic Religion , but Tax is
imposed by the Government by Low
ragardless
to Religion.
- Zakat is based on Religious and Ethical
Values ,but Tax mostly ignores such
Values and based on monetary factors .1/25/15

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- Zakat is calculated
according to Fiqh Rules ,
but Tax is
calculated
according to
Governmental Rules.

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- Zakatable

wealth is gained
from Good and Halal Sources,
but Tax
Revenues and
Incomes may be earned
from Non-Halal and Worse
Sources from the sight of
Islam Rules .

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- Zakat Rules are stable and permanent

for each Time and place because they
excreted from Quran and Sunnah ,while
Tax Rules are variable.
- Zakat purifies soul and money ,while
Tax does not .

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Accordingly ,:
Tax is not a Zakat
Zakat is not a Tax

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Chapter Two

Zakat Accounting
Rules

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Zakat Accounting Meaning

It mans the calculation,

reviewing and announcing

of Zakat on money .It is
governed by a group
of Accounting rules,
extracted from the sources
of Islamic Shariah,

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Zakat Accounting
Objectives
They are as follow:
- Determining the Zakat Base .
- Calculating the Due amount of Zakat .
- Preparing Zakat Statements and
Reports .
- Distributing Due Zakat amongst
its Duers.

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ZAKAT ACCOUNTING RULES

( PRINCIPLES )

Zakat Accounting
Rules

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1. The Lunar Year

Zakat is calculated according to the lunar year.
Counting starts when the amount of money attains the
Nisab (the minimum amount on which Zakat should be
paid). This includes all kinds of Zakat except Zakat on
agriculture, fruits, mineral assets and Rikaz (metals
found in the earth).

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2. Independence of each Year:

Each Zakat year is an

independent one, and Zakat on
a given amount of money
should not be more than once in
the same year. Duality should
be avoided. The Prophet (Peace
be upon him) said: No duality
in Zakat giving.
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3 Actual or Assumed Growth:

Actual or assumed growth of an

amount of money is a condition for
any Zakat is to be given from this
money. Therefore, Zakat is not due
on fixed assets or things for
personal use. This is because the
condition of actual or assumed
growth would not be met.
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4. Zakat Base should

reach
Nisab
Zakat is due on money which
is abounding (more than
basic needs). No Zakat is due
for little amounts of money.
The amount of money should
reach
the
Nisab.
This
guarantees that only those
who have the capacity of
paying will be obliged to pay.
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5. Calculating Zakat
Zakatable Money

on the Total

or Net

For every kind of money or

activity there is a rule for
calculation Zakat which is due
on it. Some are calculated in
relation to the total amount and
others are calculated in relation
to the net amount ( Property).
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6. Grouping Money of the Same kinds together as

Zakatable Base:

It is permissible to group cash

money of wealth to cash money
available
from
offers
of
commerce and other gained
cash money, so that for all these
monies there would be one
Nisab and one Zakat Year.
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7. Evaluating Zakatable Money according to the

Current value .

Evaluating cash money of

wealth and cash money from
offers of commerce to define the
due Zakat should be according
to the current value at the time
of paying Zakat. They should not
be evaluated according to the
historic value, cost or market,
whichever is less.

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Equations of
calculating Zakat

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1. Receptacle

of Zakat
Zakat

=
Base = Zakatable Money
2.

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( Assets),( Less ) - Zakatable

Liabilities which are due to
be paid at the moment.
30

Zakatable Money( Assets )=

Assets which meet the conditions of
obligatory Zakat.

2.

3.

4.

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Zakatable Liabilities = which are

due in
short time.

Due Zakat = Zakat Base By

Rate

Zakat

31

Conditions of Zakatable
Money
They are as follows:
a. It should be a full ownership.
b. It should be Growing actually or
assumed
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c. The completion of
Year except for
agriculture, fruits,
wealth or Rikaz in

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one Lunar
Zakat on
mineral
earth.

33

d. Not other kind of Zakat has been

paid on the same
Zakatable Money within the
same year.
e. Zakatable Money should
exceeds Basic Needs.
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f. Zakatable Money should not

include a Debt which is due
at the time.(short term Debts)
g. Zakatabe Base should reach the
(Nisab).
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Conditions of
Zakatable Liabilities
They are Short Term Liabilities
which
are
due
payment
according
to
the
following
conditions :

a. Liabilities should be related

to the activity.

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b. Liabilities should be due

payment
during the
coming year.

c. Liabilities should be legally

permissible.
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Nisab = the minimum

amount of
Due Zakat
It is equal to 85

grams of pure gold.

A gram should be evaluated
according to current prices at
the time of paying Zakat in the
country in which the original
money is located.

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The Amount of Due Zakat

When Zakat Base money once
reaches the Nisab , the Due
Zakat is calcuated as follow :
Zakat Base x the price of
Zakat.
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Steps of Calculating Zakat

( Zakat Accounting Procedures )

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Zakat should be calculated according to the following steps:

1. Defining the date completion the

Lunar year. This date varies
according to the circumstances
of the Zakat giver ( Payer).

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With the exception of Zakat on

agriculture, fruits, minerals and
minerals in the earth. In these cases
Zakat should given at time of harvest
or the acquisition of the minerals.

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In the case of defending the Lunar year

for the first time, the date of
beginning and the date of completing
should be defined according to the
date of reaching the Nisab amount.

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2. Different Monies owned by the Zakat

Payer should be assessed at
the end of year according to
the rules of Zakat.
From this money it should be
defined on which Zakat must
be given. They are called
Zakatable Money ( Assets).
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3. Assessment of Taxable Liabilities

(deductions) which are due to be
deducted from Zakatable money
according to the rules of Zakat.

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4. Defining the receptacle of Zakat

Zakat Base ) by the deduction of
Due Liabilities from Zakatable
Money by the following equation.

The receptacle of Zakat ( Zakat Base ) =

Zakatable Money Due Liabilities.

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5- Calculating the Nisab as

mentioned
before. Each kind of Zakat has
a
special Nisab .

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6. A comparison should made between

the Zakat Base, defined in step 4
above, with Nisab defined in step 5.
So as to know whether Zakat is due
or not. If the Zakat Base has
reached the amount of Nisab, then
Zakat would be Due.

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7. Define the amount which should be

taken from the receptacle of Zakat
( Zakat Base ), it is as a
Percentage % , it is culled the
Price of Zakat ,
It varies from 2,5% to 20% of
Zakat Base

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8. Calculating the amount of Zakat by

multiplying the amount of the
receptacle by the amount of the
price (or percentage) of Zakat. The
result should be the amount of due
Zakat.

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9. Define who pays the due Zakat a

follow :
a. For individuals and personal
establishments:
The individuals or the owner should pay the
due Zakat.

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b. For partnership:
The amount of the due Zakat should
be divided between the partners,
each according to the percentage
ofhis share in the capital of
partnership.

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c. For investment companies:

The amount of the due Zakat should
be divided on the number of
shares to know the amount of
Zakat due on each share. Each
investor should then pay Zakat
according to his ownership of shares.

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d. For partnerships of labor and

capital (mudarabah Sahriyyah) :
The laborer (Mudarib) pay Zakat
according to his share of profits.
Whereas the financier (Mumawwil)
should pay Zakat on the capital and
the profit less the laborers share.

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10. Zakat Amount should be

distributed according to its duers
in the light of the rules of
Islamic Law (Shariah).

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It is permissible to give Zakat to

institutes or committees of Zakat to
redirect the funds in their due
activities and persons according to
Islamic Law (Shariah).

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Zakat Duers
Zakat Funds should be spent as mentioned in
the Holy Quran:

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) ( 60 :

58

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 Zakat are for the Poor, and the

Needly,and
Those Employed to administer the funds,
for those whose hearts have been
recently reconciled to Truth , for those in
Bondage and in Debt , In the cause of
Allah , and the Wayfarer , Ordained by
Allah , and Allah is full of knowledge and
Wisdom .
( Al Tawbah -60 )
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The Duers of Zakat as mentioned in this

Verse are as f0llow :
1. The poor.
2. The needy people.
3. Those employed to administer the
Funds.

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4. Those whose hearts have been

recently reconciled to Truth
5. Those in Bondage.

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6. Those in Debt.
7. In the cause of Allah.
8. The wayfarers.

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The Nisab for cash wealth is 85

grams of pure gold, or its
equivalent in cash, or 595 grams
of pure silver. The Islamic
Commission for Research has
recommended to use the Nisab in
gold.
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The Zakat Rate on Cash Wealth is 2.5%

The Amount of Due Zakat=
Zakat Base by Zakat Rate

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The calculation steps are as follows:

a. Define the time when the Zakat

is due (Al-Hawl), which starts
from the time when the amount
of money reaches Nisab.

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b. Define all items of Cash Wealth, on

which Zakat must be paid
(Zakatable Money).

c. Asset all items of cash wealth

according to market value at the
time when Zakat is due.
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d. Deduct all Liabilities on the

Zakat
giver from his cash
wealth so
that to know the
receptacle of Zakat.( Zakat
Base ).

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e. Compare between the receptacle of

Zakat and the Nisab, which is
equivalent to 85 grams of gold
according to the market value. If
the receptacle reaches the Nisab,
then Zakat is due to be paid.

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f. Calculate the amount of Zakat by

multiplying the receptacle by the
price of Zakat, which is 2.5%.
The following statement shows an
example of calculating Zakat on cash
wealth:

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Zakat on agriculture and fruits are due

at the time of harvest or
collecting, according to Allahs
instruction:
) :
(
but render the dues that are
proper on the day that harvest is
gathered
(Al-Anam, or Cattle, 141)
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Therefore, if an area of land

produces more then one crop within
the year, its owner should render
zakat on each crop separately.

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The following are steps of

Calculating the Zakat of Zakat
on agriculture and fruits and
calculating their Due amounts:

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a) Measure the total production of the land

either by production quantity or cash.
b) Define the expenses on the production, if the
opinion adopted is that which says that
expenses should be deduced as far as they
do not exceed the third, which is the opinion
of the Sixth Fiqh Seminar of Barakah.

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c) Define the Zakat Base by deducing

(item b) from the (item c).
d) Define the amount of the Nisab, which is
equivalent to 5 Awsaq, or the equvalent to 50
Egyptian Kaylah, or 653 kg of wheat
d) Define the Zakat Rate according to the
Method of Watering , 5% or 10% .

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e) Calculate the amount of Zakat as follows:

- In the case of watering by cost:
Amount of Zakat =
Zakat Base x 5% =
- In the case of watering without cost:
Amount of Zakat =
Zakat Base x 10% =

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What is meant by cattle is camels, cows,

sheep. Zakat is due on them only if they
are bred for multiplication on cattle
differs according to the kind of species.
For camels it is five, for sheep it is forty,
whereas for cows it is thirty. One should
refer to Fikh books for more details.

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a) Define the number of cattle,

deducing the working animals and
the ones ready for trade (for which
there is a different way of
calculating Zakat.

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b) Compare the number with Nisab. If it

is less than the Nisab, then no Zakat
is due.
c) Define which category the number
falls into, in order to define the
amount of due Zakat.

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d) Define the Zakat due according to

tables in Fiqh books.
We include on next Slide a form for
calculating the Zakat on cattle.

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Mineral and marine wealth include

anything of value which is brought
out from the earth or the bottom of
rivers, seas or oceans. Minerals in
earth (Rikaz) are treasures which are
buried in the earth.

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The Nisab for minerals and marine

wealth is the same as the Nisab for
cash wealth, i.e., the equivalent to 85
grams of gold. On the other hand,
Zakat is due on minerals in the earth
regardless of their quantity. For both
categories there is no need to wait
until a year ends.

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a) Define the net production from the

earth or sea, on which Zakat must
be paid.
b) Compare the net production with the
Nisab (the equivalent to 85 grams of
gold) in the case of mineral wealth.
For Rikaz there is no Nisab.

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c) Calculate the amount of Zakat, if the

receptacle reaches the Nisab, the
basis of 2.5% for minerals and 20%
for Rikaz.
We include on next slide a form for
calculating the Zakat on mineral and
marine wealth.

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* Zakat on mineral and marine wealth after

the completion of production sorting,
purification or cleaning and preparation for
sale.
Machinery, manpower and other expenses of
production are not be deduced.

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It is a Zakat on revenue from

investing Fixed Assets
reoccurring, such as real
estate, cars and others.

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No Zakat is due on the actual assets

because they are of the same
category as assets obtained for
establishments (fixed assets). Zakat,
however is due on their revenue
once these revenues reach the
Nisab, after deducing actually paid
expenses and debts which are
currently due.
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Receptacle of Zakat on investment

assets is calculated by deducing
actually paid expenses and debts
which are currently due from revenue
Due Zakat is calculated according
to the following steps :

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a) Define the total annual revenue

at the end of year.

b) Define all expenses of getting

the revenue.

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c) Deduce expenses which are

actually paid from the
total
revenue to define
the net
revenue, on
which Zakat
must be
paid.

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d) Deduce currently due debts which

the Zakat giver must pay and also
the cost of original matters, if they
were not deduced from any other
receptacle of Zakat.

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e) The net of all the above should be

added to any cash and trade goods
owned by the Zakat giver and on
which no Zakat is paid at the end
of the year to ascertain the
receptacle.(Zakat Base ) .

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f) Compare receptacle (e) with the Nisab,

which is the equivalent to 85 grams of
gold. If the receptacle reaches the Nisab,
then Zakat should be calculated on the
basis of 2.5%, which is the chosen
opinion for the present guide.

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This category includes wages,

salaries, income from freelance work
and won money. Zakat must paid on
what remains of this money at the
end of the year by adding it to other
monies owned by the Zakat giver
when calculating the Nisab and the
Zakat year.
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a) Define what remains from the

revenue at the end of the year
after deducing what is actually
paid from costs of basic needs
and after paying outstanding
debts, if there were any which
were not deduced from other
receptacles of Zakat.
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b) Compare what remains in step (a)

with the Nisab (85 grams of
gold) to know whether Zakat is
due or not.
c) Calculate the amount of Zakat if
the receptacle reaches the
Nisab, on the basis of 2.5%.

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The Following is a Statement

for calculating Zakat on
revenue from work.

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a) The professional should define a

date for ending the Zakat year,
which may be the end of the
financial year for example.
b) Calculate all direct revenues from
practicing the profession from
the beginning to the end of the
Zakat year.
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c) Define expenses and costs which

were actually spent in order to get
the revenue from practicing the
profession.

d) Define the basic needs for the Zakat

giver and his dependants which were
actually spent during the year.
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e) Define the debts which were paid by

the Zakat giver during the year
(if there were any).

f) Define the receptacle of Zakat by

deducing (b, c, d, e,) from (a).

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g) Compare the receptacle from the

previous step with the Nisab (85
grams of gold).
h) Calculate the amount of Zakat if the
receptacle reaches the Nisab on the
basis of 2.5%.

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A Statement for calculating Zakat

on revenue from freelance
professions is on next slide. A form
for calculating Zakat on revenue
from freelance professions is on next
slide.

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ZAKAT DUERES
MASARIF AL-ZAKAT

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Zakat Duers in Quran

:

] . [60 :




103

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 Zakat are for the Poor, and the

Needly,and
Those Employed to administer the funds,
for those whose hearts have been
recently reconciled to Truth , for those in
Bondage and in Debt , In the cause of
Allah , and the Wayfarer , Ordained by
Allah , and Allah is full of knowledge and
Wisdom .
( Al Tawbah -60 )
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Zakat Duers ( Masarif )

The Duers of Zakat as mentioned in
the Holy Quran are as f0llow :
1. The Poor.Those are under the standard
of Living ,i.e. They suffer in finding the
essencials of basic live .
2. The Needy people: Those are under the
normal standard of live .
3. Those employed to administer the
Funds.

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Zakat Duers- cont.

4. Those whose hearts have Been
recently reconciled to
Truth
and become Muslim.

5. Those in Bondage., such as to

free
Muslim Prisoners .

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6. Those in Debt: such as those

whom are Debaters and unable
to pay their Debts .
7. In the cause of Allah: for Gihad
to make the word of Allah is the
Hiarer , and who Fight for Islam
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8- The Wayfarer : Travellers

Whom
their Money has
been lost
oir finished .

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Zakat Duers in The

Sunnah
:
.... ) ...
(
The Prophet ( PBUH. ) said : Take from the
Rich among them and paid it to the Poor
among them .( related by Moslim)

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Zakat Duers Rules

Muslim Scholars have summarized the
main Rules of Zakat Dures as follow :
1- The Poverty : those under Living
Standard
2- The Needy : those who need for
satisfy the essentials of Living

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3- Zakat Funds should not be paid to rich

people or to any person able to work .
4- Zakat Funds should not be given to
Relatives whom the Zakat payer is
compulsory to spend, such as Parents
5- It is permitted to transfer Zakat Funds
from place to another for Poor
Relatives.
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6- It is permitted to give Zakat Funds to

the following :
* Poor Students
* Poor Silly People
* Poor Relatives
* Poor Coming to Marriage
* Poor Orphans

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7- It is permitted for the Wife to give

here
Zakat Fund to here poor Husband
and it is not permitted for the
Husband
to give his Wife his Zakat Fund .
8- It is permitted to give Zakat Funds to
Social and Religious Societies

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9- It is permitted to transfer Zakat

Funds
to Mugahideen ( Holy Strugglers for
the cause of Allah ) abroad .
10-It is permitted to pay Zakat Funds to
Islamic Societies and
Establishments
which struggle
against the Enemies
of Islam.

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11- It is allowed to pay Zakat in Advance

but not permitted to delay it except
there is a Legistrate Necessity .
12- When you are intended to pay Zakat
you should to make Niyya and pray
Allah and Praise Him .

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