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Zakat On Salary And Government Allowances And Deductions
In case of government employee, his salary consists of Basic pay plus Dearness Allowance, Transport Allowance, HRA and other. And government make some recoveries each month towards pension, medical insurance and other heads.
Here, is zakat of 10% applied on amount which an employee gets after government recoveries or on Basic+DA+Allowances?
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Zakat On Salary And Government Allowances And Deductions
updated 12 months ago
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As a general principle, Zakat on Salary is 10% on gross salary which a person receives i.e. zakat is on production or salary you earn for doing a job (as a wage for your effort).
For Allowances:
If your employer is providing you money for something that’s required for you or is essential to be provided for you to do your job (e.g. transport allowance or rent allowance etc.), that money is not considered production, hence there is no zakat on it. But one must ascertain this fact honestly because in some employments specially the government employments, such allowances are mentioned in the payslip as a formality but actually they are part of the earning or wage for that job. Therefore, the dearness allowance, Transport allowance, HRA and others would need a fair assessment in this regard.
For Deductions:
The principle is that for zakat to be due on an asset/earning, it has to be at one’s disposal (tasarruf). Whatever has been deducted from the Salary on account of pension will be deducted from Zakat calculation for now. Pension amount is subjected to 10% production zakat, however, it only becomes due when you receive the pension.
As for other deductions like medical insurance etc. it needs to be ascertained whether such deductions are integral/required in performance of the job and if yes, then such deductions will also be deducted from Zakat calculation otherwise they will not be dedcuted.
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