How Is Zakat on Wealth Calculated? – Shaykh Dr. Muhammad Abu Bakr Badhib

Answered by Shaykh Dr. Muhammad Abu Bakr Badhib

Question

How is Zakat on wealth calculated?

Answer

In the name of Allah, and all praise is due to Allah, and blessings and peace be upon our master Muhammad, the Messenger of Allah, his Family, his Companions, and those who follow him.

Zakat is one of the essential pillars of Islam, known as an obligation by necessity. It is due on specific types of property, the most important of which is Zakat on wealth, referred to by jurists as Zakat on the two precious metals, meaning gold and silver. This is because the original legislation of Zakat was primarily based on these metals due to their circulation and intrinsic value during the time of legislation.

The money people handle today is not gold and silver, as they are no longer in circulation as in ancient times. Instead, financial transactions are based on paper currency, which has replaced gold and silver in trade and commerce. Scholars have ruled since the appearance of paper currency and its widespread use in commercial transactions that it takes the place of gold and silver and is subject to Zakat when it reaches the equivalent of the Nisab (minimum amount liable to Zakat) of either gold or silver.

The Nisab for gold is twenty Mithqal, which, by today’s standards, is equal to 85 grams of pure gold. The Nisab for silver is two hundred Dirhams, which is equal to 595 grams of pure silver.

These Nisab are equivalent in our current year [1445 AH = 2024 CE] to:

1. The value of 595 grams of silver is approximately 2,257 Saudi Riyals / 601 US Dollars.
2. The value of 85 grams of gold (24 carat) is approximately 24,497 Saudi Riyals / 6,524 US Dollars.

Nisab for Cash—Gold or Silver?

This question naturally arises, and the opinions of contemporary scholars and jurists vary on this matter:

First Opinion: Gold

Zakat should be based on the nisab of gold. This opinion is considered closer to the nisabs for livestock (camels, cows, and sheep). This view is supported by scholars from Al-Azhar, such as Shaykh Jad al-Haq [Fatawa Dar al-Ifta’ al-Misriyya], Abdul Latif Hamza [Ibid.], and endorsed by Qaradawi [Qardawi, Fiqh al-Zakat; Hassan, al-Awraq al-Naqdiyya], Abdul Karim Zaydan [Zaydan, al-Mufassal], and the Council of Senior Scholars in Saudi Arabia [Abhas Hay’at Kibar al-‘Ulama]

(It should be noted that Ibn Baz supported the third opinion, which states that zakat should be paid when the lowest nisab is reached. Ibn ‘Uthaymin chose the nisab of silver.) [Mansuri, Zakat al-Awraq al-Naqdiyya]

Second Opinion: Silver

Zakat should be based on the nisab of silver, as this is more cautious concerning the poor. Since silver’s nisab is lower in value than gold, this increases the number of people obliged to pay zakat, thus benefiting more poor and needy individuals. This view is supported by contemporary Shafi‘i jurists like Qadi Abd al-Rahman Bakir al-Hadrami al-Shafi’i  [Link], and also by Said Sabiq [Sabiq, Fiqh al-Sunna] and Dr. Salkini [Salkini, al-Fiqh al-Islami]

Third Opinion: Lowest of the Two

Paper currency should be zakat-ed when it reaches the lower of the two nisabs (gold or silver). This was the decision of the Islamic Fiqh Academy during its fifth session in 1402 AH [Majallat al-Majma‘ al-Fiqhi], and it was also the fatwa of Shaykh Hassan Ma’mun [Fatwa Dar al-Ifta’ al-Misriyya].

This is the summary and transmission of the answer to this question. May Allah bless the questioner for seeking clarity in his religion. We ask Allah to grant us all success in what He loves and is pleased with and to help us fulfill our duties and obligations completely without deficiency. Allah is the Guide and the One who shows the right path.

For further details on the matter, refer to:

• “Al-Awraq al-Naqdiyya” by Ahmad Hassan;
• “Al-Awraq al-Naqdiyya” by Ba Fadl;
• “Zakat al-Awraq al-Naqdiyya” by Mansuri.

And Allah is the best Guide.

[Shaykh] Dr. Muhammad Abu Bakr Badhib

Shaykh Dr Muhammad Abu Bakr Badhib is a prominent Islamic scholar from Yemen born in Shibam, Hadhramaut, in 1976. He received his degree in Shari‘a from Al-Ahqaf University, a master’s degree from the Islamic University of Beirut, and a PhD in Usul al-Din from Aligarh Muslim University (AMU).

He studied under great scholars such as Shaykh al-Habib Ahmad Mashhur al-Haddad, Shaykh Fadl Ba‘ fadl, Habib Salim al-Shatiri, Habib Ali Mashhur bin Hafeez, and others. He has served as the Director of Publications at Dar al-Fiqh, the former Deputy Director of Cultural Relations at Al-Ahqaf University, a former Assistant for Employee Affairs at Atiyah Iron Company, a researcher at the Sunna Center affiliated with the Dallah al-Baraka Foundation, and a researcher at Al-Furqan Foundation’s Makka al-Mukarrama and Madina al-Munawwara Encyclopedia branch.

Currently, he is a researcher at Al-Furqan Foundation’s Makka al-Mukarrama and Madina al-Munawwara Encyclopedia branch, teaches traditionally through the Ijaza system at Dar al-Fuqaha in Turkey, supervises the Arabic department at Nur al-Huda International Institute (SeekersGuidance), and is a member of the Board of Trustees of the Manuscript House in Istanbul.

His works include “The Efforts of Hadhramaut Jurists in Serving the Shafi‘i School,” “Contributions of Hadhramaut Scholars in Spreading Islam and its Sciences in India,” “Hada’iq al-Na‘im in Shafi‘i Fiqh,” in addition to verifying several books in Fiqh, history, the art of biographies, and Asanid (chains of narration).