Zakat On Businesses With Profit And Loss
Production zakat is calculated as follows: 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) This zakat becomes due at the time of production (e.g. paycheck or service fee is received). If needed, it can also be delayed and paid once a year in lump sum. For a business where profits and losses are volatile from one month to the next, it makes more sense to sum up the profits and losses once a year and pay zakat on the remaining amount.