Shari’ah Principles on Zakat Calculation:
Nisab, Rates & Issues
Dr. Mustafa Omar Mohammed
Outline
2
Zakat on livestock
Zakat on Gold and Silver
Zakat on Business Inventory
1
Zakatable Assets
Introduction
3
Zakat on Agriculture
Zakat on labor
4
Issues
Introduction
Zakat
is multi-dimensional: religious,
social, economic, spiritual. Hence the
issue of ijtihad
In embodies joint rights [Allah, the
payer and the beneficiaries]
Inculcates giving behavior& and other
positive values
Zakatable Assets
1
2
3
4
5
6
7
• Undivided and absolute right of ownership
• [Implications: assets without specific owner,
assets in public trust-mosques, waqf, unlawful
wealth, Zakat on debts, grants and employee
savings, etc
• Growing assets
• Reaching Nisab
• Al-Hawl
• In excess of needs
• Freedom from debt
Zakat on Livestock
The prophet s.a.w provided nisab and rates for
sheep, camel and cows
Khalifah Umar r.a. added horse to the list, he
collected 1 dinar per horse
Zakat calculation on Sheep, camel
and cow
Must meet the nisab
The passage of lunar calendar year
Should be pastured naturally [costfree]
Should not be animals used for work
Zakat calculation on Sheep, camel
and cow
Camel
Sheep
5-9
1 sheep
Nisab
1-39
40-120
121-200
Rate
No Zakat
1 sheep
2 sheep
10-14
15-19
2 sheep
3 sheep
20-24
25-35
4 sheep
1-2 yrs 1 FC
201-300
Above
300
3 sheep
Additional 100, 1
sheep
---Above120
Additional 50, 3-4 yrs FC
Additional 40, 2-3 yrs FC
Zakatability of baby animals?
Zakat calculation on Sheep, camel
and cow
Cow
Nisab
1-29
30Above 120
Rate
No Zakat
Additional 30, 1 yr cow
Additional 40, 1cow
Ratios: 5 camels: 40 sheep: 30 cows
Zakat calculation on Gold and Silver
Gold and Silver
Nisab
85 grams of gold
595 grams of silver
Rate
2.5 %
2.5 %
Exemptions include:
ladies jewelries for personal use not as al-Rahn
Men’s uses for medical reasons, e.g., teeth
Zakat calculation on Business Inventories
Business Inventories
Nisab
85 grams of gold
595 grams of silver
Rate
2.5 %
2.5 %
Business Inventories include:
Final goods and services
Financial assets [Securities, shares, unit trusts]
Zakat calculation on Business Inventories
Approaches
Net Current Asset
Net Growing Capital
Current Assets less
Current Liabilities
Adjustment by adding
short term debts and
reducing long term debts
Zakat payable= 2.5% x
[Muslim share ownership]
Zakat on shares= 2.5% x [Market value per share x quantity of shares]
Zakat on Sukuk= 2.5% x [Market value per Sukuk x quantity of Sukuk]
Zakat on Labor
Deducted
at source
Rate at
2.5% on
annual
income
Nisab of
gold and
silver
ZAKAT ON LABOR
No
Items
Amount (RM)
1
Annual gross income
2
Deductions
3
Personal needs
8000
4
Expenditure per wife
3000
5
Expenditure per child
1000
6
Expenditure to Parents
7
Contributions to EPF
(11% annually)
8
Contributions to charity
organizations
9
Total Deductions
10
Total zakat payable
ISSUES
Lack of awareness
 Lack of effective management
 Lack of trust
 Lack of transparency
 Variations of fiqh opinions

Thank You
Wa Allah A’Lam