How To Pay Zakat on Delayed Payments Stuck in the Business?

Answered by Shaykh Abdul-Rahim Reasat

Question

My brother is the owner of a small enterprise that takes part in government bidding for the supply of Medical, surgical, and lab items. He buys the items from vendors or manufacturers and brings them to his warehouse where he supplies them to his customers. His customers pay him the whole amount after the completion of supply contracts.

My question is when calculating zakat, does he include the amount that’s not yet received from the contracts and security checks? How should he pay zakat?

Answer

Yes, zakat is due on the payments owed to him which he has not yet collected. When calculating his zakat he takes that amount into consideration. If the total value of his stock and cash, etc, is above the nisab, he owes zakat on it all.

He then deducts the amount which he has not yet collected and pays 2.5% of what is in his possession as zakat. When he gains possession of the money owed to him he must pay 2.5% of that amount as zakat at that point. This can be done in advance if he has the money. [Shurunbulali, Maraqi al-Falah]

May Allah bless you with the best of both worlds.

[Shaykh] Abdul-Rahim Reasat
Checked and Approved by Shaykh Faraz Rabbani

Shaykh Abdul-Rahim Reasat began his studies in Arabic Grammar and Morphology in 2005. After graduating with a degree in English and History he moved to Damascus in 2007 where, for 18 months, he studied with many erudite scholars. In late 2008 he moved to Amman, Jordan, where he continued his studies for the next six years in Sacred Law (fiqh), legal theory (Usul al-fiqh), theology, hadith methodology, hadith commentary, and Logic. He was also given licenses of mastery in the science of Quranic recital and he was able to study an extensive curriculum of Quranic sciences, tafsir, Arabic grammar, and Arabic eloquence.