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  • Zakat Versus Taxes

    Posted by Yasmeen Tahir on April 26, 2022 at 4:25 pm

    Assalam O Alaikum

    In my quest to understand the obligatory pillar of Islam , I have a few questions that I would appreciate and answer on.

    1- the difference between taxes and zakat being understood , what I gather is that Zakat is due on disposable wealth ( after one’s needs are satisfied) rather than total wealth ( taxes in US). Isn’t it like paying taxes twice?

    In one of your lectures I heard you said that once you reach the Nisab theshhold, calculate Zakaat as directed and if you pay that amount in taxes , then Zakat is considered to be paid .

    2- the eight categories of people listed in Quran does not mention directly not to pay to any Non Muslims. So it it correct to assume that It’s a preference not a compulsion to pay to Muslims only?

    And Allah knows best

    Please shed some light on these 2 questions. I would very much appreciate some guidance .

    Jazakallah

    Yasmeen

    Sent from my iPhone

    Faisal Haroon replied 7 months, 4 weeks ago 2 Members · 11 Replies
  • 11 Replies
  • Zakat Versus Taxes

    Faisal Haroon updated 7 months, 4 weeks ago 2 Members · 11 Replies
  • Faisal Haroon

    Moderator April 26, 2022 at 7:18 pm

    The sharia of zakat has two separate components that apply to most people.

    1. Zakat on Earnings (Production)

    It is calculated as:

    5% on amount earned from both labor and financial investments (e.g. profit from manufacturing or service businesses)

    10% on amount earned from either labor or financial investments (e.g. salary or capital gains)

    20% on amount earned without labor or financial investments (gifts from God e.g. found treasures)

    2. Zakat on Assets

    Zakat on assets is due once every year. Your state may determine a day of the year for your zakat to be due. If not, you can pick a day of the year and pay your zakat on the same day every year. This zakat is calculated as 2.5% of the sum total of all of your cash as well as the current value of all other assets in your posession on the day when your zakat becomes due. Items of personal use, e.g. house, car, and personal jewelry are exempt.

    Taxes paid in any country (e.g. U.S.) that uses it for the benefit of its citizens can be deducted from your total zakat obligation.

    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.

    View Zakat Calculator

    It is to be noted that zakat only becomes due in each category when the nisab is met for that category.

    For details about the sharia of zakat as well as frequently asked questions in this regard please see:

    Discussion 46733

  • Yasmeen Tahir

    Member April 27, 2022 at 9:53 am

    Jazakallah for answering my question . One more question:

    If the Jewellery we get on our weddings is kept in safe deposit and is only used infrequently, would that be included as wealth for Zakat or is it exempt as ornaments of personal use?

    Secondly, if we deduct the zakat from the taxes that we have paid , those taxes are not necessarily used for the betterment of Muslims first . Rather they are used for all sorts of govt projects and running of govt affairs and living in US, we are not a Muslim state . So would this use of our tax money still be accepted as zakat being paid to the right people ?

  • Faisal Haroon

    Moderator April 27, 2022 at 9:58 am

    Yes any assets in personal use, regardless of how infrequently they’re used, are exempt from zakat.

    Yes, taxes even in Non-Muslim countries can be deducted from the total zakat obligation.

    Discussion 49509 • Reply 49515

  • Faisal Haroon

    Moderator April 27, 2022 at 10:01 am
  • Yasmeen Tahir

    Member April 27, 2022 at 10:38 am

    So once I have calculated my zakat and , for example , it comes out to be $2,000 and I owe $ $4000 in taxes to the government and I pay that amount, I can count this as zakat paid .

    Now it’s up to the govt to decide how to use that money ? I don’t have any direct control over where it is spent ?

    Am I correct in my thinking . I appreciate you prompt feedback . Things are becoming so clear . I have already listened to the lectures that you referenced to and needed a little bit of clarity .

    Thank you

  • Faisal Haroon

    Moderator April 27, 2022 at 10:55 am

    Yes, since the government is collecting taxes instead of zakat and they’re already doing things that are stated as heads of zakat in God’s law, we can deduct taxes from our zakat obligation.

    If you have paid more in taxes than your total zakat obligation then you need not pay any additional zakat.

  • Yasmeen Tahir

    Member April 27, 2022 at 11:00 am

    Thank you.

  • Yasmeen Tahir

    Member April 28, 2022 at 9:43 am

    Br. Haroon,Salaam I am reaching out to you once again to get your input to a response I got from Zakat foundation of North America .Is the answer below the correct way of understanding Zakat ?
    There is no comparison between Zakat and Taxes. Zakat is our religious​ duty ; taxes are our citizenship duty. You pay taxes because you are receiving services. You pay Zakat because your wealth above Nisab. You calculate your Zakat after you pay your Taxes, not before. So that you do not pay twice, only once. Whatever amount left after paying taxes , is Zakatable if it is above Nisab.

  • Faisal Haroon

    Moderator April 28, 2022 at 10:09 am

    It’s true that zakat is our religious duty, and must be paid regardless of whether or not we’re required to pay taxes. However, as explained above, the purpose that zakat serves is the collective good of a society. Taxes in most cases serve the same purpose.

    For understanding the sharia of zakat, please refer to:

    Discussion 46733

  • Yasmeen Tahir

    Member April 28, 2022 at 10:21 am

    Thank you once again. To be honest. I am a huge fan of Ghamidi Saheb. His views make sense but in matters of obligatory duties , one’s heart and mind is constantly in turmoil due to conflicting views.

    I believe that as long as the essence / intent of the duty is fulfilled, it is ok and Allah knows best.

    I hope and pray that Allah guides me to the right path . Ameen

  • Faisal Haroon

    Moderator June 5, 2022 at 11:31 pm

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