Zakat Versus Taxes
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