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Annual Zakat On Savings In Addition To Zakat On Production?
Please guide me on following questions. After paying 10% Zakat on salary each month, lets say first time calculation of annual savings of same money earned through monthly salary on which 10% Zakat is already paid, reached to 100K, do I also have to pay 2.5K annual Zakat?
If YES then next year, if savings are still 100K, do I still have to pay annual Zakat on 100K as Zakat is already paid on same amount last year (like we don’t pay taxes for same amount each year)?
Follow up question, If savings becomes 150K, annual Zakat would be on 50K or 150K?
And if another year, savings reduced to 120K, do I have to pay Zakat on 120K or no Zakat and keep 30K loss to be calculated in next year Zakat? And lets say next year zakat again becomes 150K, you pay no zakat since Zakat is already paid on 150K. But if your saving becomes 180K, you still pay no Zakat since you carry over loss of 30K from previous years?
Moreover, if all jewelry is for personal use, I mean, not wearing everyday but in family get togethers and occasions, is Zakat still applicable on that yearly which only used occasionally but not daily?
if YES then same question, if Zakat paid once then it has to pay every single year on same jewelry?
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3 Replies
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Annual Zakat On Savings In Addition To Zakat On Production?
updated 2 years ago
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Replies
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All personal items, regardless of how sparingly they’re used, are exempt from zakat.
Zakat on production/earning is separate from zakat on savings/assets. They’re each calculated separately without one having any bearing on the other.
In case of a salaried individual, 10% zakat on earnings becomes due as soon as you receive the paycheck as long as you’re above the production nisab. One may defer it and pay it once a year in lump sum.
Zakat on savings/assets is due once a year on a pre-determined date. The date can be specified by the state, but if not one can pick an arbitrary date of their liking. Generally people pick a day in Ramadan. On that day, if you’re above savings/asset nisab, you sum up the total current value of all of your assets that are not in personal, subtract the amount of nisab, and pay zakat at the rate of 2.5% on the total. It doesn’t matter whether you have paid zakat on those assets previously or not. If you get an asset the night before your pre-determined date, it will be subjected to zakat the next day. Similarly, if you lose and asset the night before your pre-determined date, there’s no zakat on it even if you held it for the entire previous year.
You may enter appropriate numbers in our Zakat Calculator after reading the description for each box. When you reach the end, it will generate a statement showing you exactly what you owe after any applicable deductions, and what percentage was applied to each category. It’s also a great way to learn the sharia of zakat.
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I understand for salaried individuals 10% earnings Zakat is due on each paycheck or it can be defer in lump sum once in a year at 10% of total earnings.
What about savings/assets Zakat at 2.5%? Let say 10% earnings Zakat of 10K from 100K annual salary paid on each paycheck and now on completing a year, the total amount left in bank account is 90K. So, now individual also have to pay 2.5% savings/assets Zakat on remaining 90K?
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Yes. Zakat on production/earning is separate from zakat on savings/assets. They each are calculated separately.
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