Yearly charity (zakat) for beginners

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What zakat is

Zakat is obligatory giving once a Muslim meets the conditions for it. It purifies wealth and goes to people who qualify to receive it. Sadaqah is different: voluntary charity, any amount, any time.

Who usually pays

At a beginner level, zakat may apply if you own zakatable wealth above the nisab threshold for a lunar year. The details get complicated quickly, so do not panic if you cannot tell. Ask a qualified scholar or a zakat institution you trust.

If you are new to Islam

• You owe no zakat for the years before you became Muslim.
• A Shafi'i answer from SeekersGuidance (Shaykh Irshaad Sedick, 2022) says a new Muslim's first zakat is not due until a full lunar year has passed from the day they became Muslim. Other schools may count differently, so ask a teacher.
• Write your Shahada date down, in the Hijri calendar as well if you can. Check your savings against the nisab on that date, and again one lunar year later.
• Your zakat date is your own. If it falls before Ramadan, you do not have to wait for Ramadan to pay.
• National Zakat Foundation Canada says most scholars allow paying zakat early, for example a set amount each month, as long as you already own the nisab and the full amount is paid by your zakat date. You then subtract what you have already paid when you work out the total. NZF describes a limit of two years ahead as a precaution some scholars add.

Nisab, hawl, and 2.5 percent

• Nisab is the minimum wealth at which zakat becomes due. It is measured by weight: Islamic Relief Canada gives it as 87.48 grams of gold or 612.36 grams of silver.
• Other Canadian charities use slightly different figures. National Zakat Foundation Canada uses 85 grams of gold or 595 grams of silver, and Muslim Welfare Canada's calculator uses 88 grams of gold or 613 grams of silver.
• Some charities use the silver figure by default, which is lower, so more people pay and more people receive. Others use gold. Which one applies to you is a question for a scholar.
• The dollar value moves with gold and silver prices, so this page does not give one. Use a current figure from the charity or scholar you follow.
• Hawl is one lunar year, about 354 days, with your wealth staying above nisab.
• 2.5 percent is the rate for cash and savings. Some charities give 2.577 percent if you count by the ordinary calendar year instead of the lunar year.

Assets that raise questions

Cash savings, gold, silver, business stock, investments, money owed to you, debts, and Canadian accounts such as an RRSP, TFSA or RESP each raise their own questions. National Zakat Foundation Canada, for example, says to count RRSP or TFSA money you can access at its value on your zakat date, and that you may subtract the tax withheld on an RRSP withdrawal. Muslim Welfare Canada's calculator only subtracts the coming year's payments on long-term debts. Scholars do not all agree, so use these as examples of the questions to ask, not as your answer.

Gold and silver jewellery

Gold and silver jewellery is one of the clearest differences. National Zakat Foundation Canada's research page (Sheikh Nabil Khan, 2022) says the Maliki, Shafi'i and Hanbali schools do not require zakat on women's jewellery that is worn, while the official Hanafi view is that zakat is due on all gold and silver, worn or not. NZF encourages paying as the cautious choice. Its page also explains how to count items that mix gold or silver with other metals. Ask which view your teacher follows.

The eight categories of recipients

Quran 9:60 names eight categories of people who may receive zakat. Applying those categories takes knowledge of local need, organization policy, and scholarly interpretation, so work through a trusted zakat organization or ask someone qualified. Most scholars say zakat goes to Muslims. If your family is not Muslim and is struggling, help them from your other money or through voluntary charity (sadaqah), which is allowed and encouraged. The FAQ on zakat and non-Muslim family explains the differences.

If you are the one who needs help

If your wealth is below nisab, zakat is not due from you, and if you are struggling you may be able to receive it. Some charities count new Muslims among those zakat can support. Penny Appeal Canada's policy, for example, reads the category of those whose hearts are to be reconciled as including new converts. Ask your masjid or a zakat charity. Needing help is nothing to be ashamed of.

Canadian registered charities

These Canadian charities collect zakat and publish how they handle it. They are listed in alphabetical order with the registration number as each one shows it on its own site. This is not an endorsement, and other good options exist, including your local masjid.

• Islamic Relief Canada: Registered Charity No. 821896875RR0001.
• Muslim Welfare Canada: CRA Charity No. 89733-1732-RR0001.
• National Zakat Foundation Canada: Registered Charity No. 839912599RR0001.
• Penny Appeal Canada: CRA no. 827502741 RR0001.

Choosing where to give

• Check the charity on the Canada Revenue Agency's list of charities before you give.
• Look for a clear zakat policy, or a scholar who reviews their decisions.
• Check that they explain who qualifies to receive it and what share goes to running costs.
• Give to the charity itself, not to a person collecting for it, and do not give under pressure. Registered charities do not ask for gift cards.
• Ask your local masjid who they trust to distribute zakat.
• Keep your own records. Do not store personal financial details in this app.
• If you give to a registered charity, ask for an official donation receipt. The Canada Revenue Agency gives federal and provincial tax credits for gifts to registered charities and other qualified donees, claimed on line 34900 of your return. Money handed straight to a person does not count. Whether a charity issues a receipt for zakat al-fitr or fidyah depends on the charity, so ask.

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