Amount is calculated from the total savings and investments held at any given time during that year.

Zakat is an important pillar of Islam. The Quran and Sunnah provide clear guidance on what zakat is and who should pay it. According to the holy Quran and Hadith, zakat is a compulsory payment of 2.5% of one’s wealth, by those who meet the necessary criteria. It is used to provide financial support to those in need, including the poor, destitute and those living in debt.

Muslims who are obliged to give Zakat must pay it before the end of the lunar year in which they earned it. However, the amount is calculated based on the total wealth of the qualifying individual, at any given time during the lunar year. An important factor to note is that zakat is an obligation for Muslims, and any earnings over the necessary requirements for essential needs must be given away.

The purpose of zakat is to purify one’s heart and thereby strengthen the community, by encouraging selfless charity. It also provides a pathway for Muslims to show gratitude to God and accept his will, as a way to bring prosperity and success. Through its effectiveness in creating communities that practice mercy and show compassion, zakat serves as an example of God’s divine plan and the beauty of Islam.

In most Muslim countries there are government-funded programmes in place to collect zakat payments and distribute the funds to needy people. Thus, zakat is an important form of charity, both religious and social, that Muslims from various backgrounds pay to make their communities stronger.