Zakat On Salary After Paying 15% Tax On It
There are two major domains of Zakat namely ‘ Wealth and Production ’. For production , zakat applies on gross amount as soon as production happens, while for wealth , zakat applies once a year on a fixed date on all the wealth ( excluding exemptions: (i) items of personal use and (ii) means of production ). This is as per established Sunnah of Prophet (SWS) for wealth and Production. When production occurs , the zakat becomes due immediately on the gross amount (irrespective of the fact when one actually pays it). Salary being a form of Production is an ‘ ijtihadi ilhaq ‘ done by Ghamidi Sahab with Zakat applicable @10%. However, one can calculate it on yearly gross earning and can pay it in installments as well. After payment of that Zakat, whatever left is one’s wealth . And if that wealth still stays with the person till the year-end i.e. the date fixed once a year for calculation of Zakat on wealth, then the whole wealth is subject to Zakat @2.5% ( that production earning as well which has become wealth of a person now ). Both these heads are subject to Zakat only if they reach the set Nisab for Zakat Obligation. Please see for further details and post follow-up questions in case of any confusion: Discussion 58129 • Reply 58137 __ Taxes paid to the government can be adjusted against Zakat obligation . Government taxes include all forms of actual taxes levied by the government including but not limited to, incomes tax, sales tax, property tax, wealth tax etc. ( Please see : Discussion 81522 • Reply 81610 ) For Example : You received Salary of $1000 for the year, the zakat due on this is $100 ( assuming that it is above Nisab because amount of production/earning/wealth below Nisab is exempt from Zakat ). You paid $150 in government taxes. Now come year-end (which is one date in the year fixed by you for calculation of Zakat on wealth), your Zakat on wealth comes out to be $200. You paid other government taxes of $200 throughout the year. Your gross Zakat obligation = 100+200 = $300 Total paid in taxes= 150+200 = $350 Net Zakat obligation = 300-350 = negative $50 In this scenario, you have paid more in taxes than your zakat obligation, hence you are not required to pay any Zakat this year. You can carry forward this $50 of more taxes paid this year for adjustment against Zakat obligation of next year.