The month of Ramadan is here and it is time for us to reflect, practice gratitude, and give back to our communities. It is a month when Muslims around the world are fasting from dawn till dusk in their respective time zones, creating those mouth-savoring iftar posts. Of course, our focus is on spiritual growth and worship during this time. As part of this spiritual journey, one of the most important obligations for Muslims is to give Zakat to those in need.
Zakat is one of the five pillars of Islam and so it is not just a form of charity. It is a mandatory act of worship for all financially abled Muslims who meet the minimum threshold of wealth (nisaab). Nisaab is calculated on the current value of gold or silver. As of April 2023, the Nisaab for gold is 87.48 grams and 612.36 grams for silver. The dollar amount of Nisaab is calculated using the current market value of gold or silver. If we use the gold conversion, then as of the day I am writing this post, 1 gram of gold is worth $68.99.
87.48 grams of gold x $68.99 = $6,035.25
Therefore, $6,035.25 is the Nisaab or minimum amount of wealth to qualify to pay Zakat this year.
Zakat is typically calculated as 2.5% of an individual's total wealth, including cash, savings, investments, and other assets that have been held for a full lunar year. The 2.5% is applied to the wealth after your basic necessities have been paid for like rent. It is important to note that Zakat is a way for Muslims to purify their wealth, give back to the community, and can be considered a means of social justice. By giving Zakat, we are helping to alleviate poverty and promote economic growth by distributing wealth fairly in our communities to either the poor/needy, debtors, or travelers.
Zakat can be given throughout the year, but giving during the month of Ramadan holds special significance. As we all know, during Ramadan the rewards for good deeds are multiplied. This means that the rewards for giving Zakat during Ramadan are much greater than at any other time of the year.
The Quran even emphasizes the importance of giving Zakat in multiple verses and mentions it alongside prayer as a way to achieve righteousness.
إِنَّ ٱلَّذِينَ ءَامَنُوا۟ وَعَمِلُوا۟ ٱلصَّـٰلِحَـٰتِ وَأَقَامُوا۟ ٱلصَّلَوٰةَ وَءَاتَوُا۟ ٱلزَّكَوٰةَ لَهُمْ أَجْرُهُمْ عِندَ رَبِّهِمْ وَلَا خَوْفٌ عَلَيْهِمْ وَلَا هُمْ يَحْزَنُونَ (٢٧٧)
"Indeed, those who believe and do righteous deeds and establish prayer and give zakah will have their reward with their Lord, and there will be no fear concerning them, nor will they grieve." (2:277)
For those looking for a way to calculate the amount of Zakat to give this Ramadan, I have found a great Zakat calculator created by the Islamic Finance Guru organization. They have multiple resources that I have read up on and continue to learn from to expand my knowledge of Halal Investing. *more to come on this topic later!*
Overall, giving Zakat during Ramadan is an important part of the Islamic faith and an opportunity to earn great rewards. It is a way to purify our wealth, promote social justice, and strengthen our communities. Let us take advantage of this blessed month and give generously to those in need, Insha'Allah!
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