How To Calculate Zakat On Cash

Zakat is the fixed amount of money that everyone must give to charity. It is seen as a way to worship and clean oneself. 

One of the five main parts of Islam is Zakat. Zakat is not a gift given out of kindness or generosity. Instead, 2.5% of one's wealth must be given to help the poor and needy every Year. Everyone must know how to figure out how much Zakat is to pay on their savings, cash, or money.

During Ramadan, many of us are thinking about how to figure out Zakat. But let's take a step back and consider what Zakat is. Why does Islam put so much value on it?

Even though many services and businesses are limited, borders are closed, and many people don't know how they will make a living, charities still help and support people. Humanitarian groups are working worldwide to ensure that the most vulnerable people are not forgotten during this pandemic.

Is it Necessary for Me to Pay Zakat?

Like any other obligation in Islam, Zakat is only required if certain conditions are met. We know Allah (SWT) never gives a soul more than it can handle.

Most experts agree that Zakat is required for Muslim adults who are of sound mind and have owned the minimum amount of Zakatable wealth, called Nisab, for at least one lunar Year.

It's important to be aware that certain schools of thought argue that if a minor is Muslim, has exclusive control of the money for a lunar year, and has a Nisab of at least 0.01%, then Zakat is also payable upon them.

No, this doesn't apply to kids' allowances or Eid gifts, but it does to trust funds and inheritances. The post's breadth does not allow for discussion of the nitty-gritty nuances and technicalities; for that, you should contact a local scholar. Simply letting you know about the potential.

How do I figure out the Zakat Cost?

Like knowing how to figure out taxes, figuring out how to figure out Zakat is easy. Here is the basic formula:

1- Add up all your income sources

Make a list of everything you've owned in the past Year. Among these are:

Your total income equals cash, gold, silver, debts owed to you, investment property, shares and stocks, investment and savings funds, and business assets.

2- Add up your current necessities and the costs of living.

These are the things that are included:

Your Day-to-Day Cost of Living = Personal & Living Expenses + Debts You Owe + Business Expenses 

3- Calculate your total Zakatable Wealth.

To calculate your Zakatable Wealth, subtract your living expenses from your total income.

4- Check to see if it's high enough for Nisab

Whether you chose the gold or silver value for Nisab, find out how much your Nisab threshold is worth in cash right now.

You may go on to the next phase of your Zakatable Wealth is more than the Nisab minimum.

5- How to figure out how much Zakat you need to pay

Your Zakatable Wealth times 2.5% = Total Zakat You Owe for the Year.

It gives you a better idea of how Zakat is calculated at its core.

You can use our Pay zakat online Calculator, where you can just put in your numbers to make it easier to figure out how much to give. It will even figure out how much your gold and silver are worth.

Where Does Your Zakat Money Go?

Zakat is more than just something you have to do once a year. It's a new idea that could help millions of people around the world who are suffering.

It's so important to our religion that it's talked about more than 30 times in the Quran, and it's often mentioned along with how to pray.

Allah (SWT) says that true believers pray without stopping and give Zakat. Because of this, we stand out as a people who not only try to improve ourselves but also try to help other people through Zakat.

Then, how does your Zakat help people? The goal of Zakat is to take care of the poor and needy, as well as the weak and disadvantaged. Its goal is to ensure that our money gets to the people who need it the most.

At TAAP Foundation, we give your Zakat to people in a way that gives them the tools they need to escape poverty. Our goal is to help people feel better and, in the long run, get them out of tough situations by helping them become financially independent.

How to Figure Out Zakat for Savings?

Add up your current savings, all cash on hand, any tradable business inventory, and the value of any active investments and marketable securities you have. Let's say it's 25,000 US dollars.

Calculate your immediate expenses, such as your monthly rent, other bills, insurance payments, payroll (if you have a business), etc. Let's say that all of that comes to $13,000.

Now, take your immediate expenses out of your current assets. This gives you 25,000 - 13,000, which is 12,000 USD.

To figure out how much Zakat is due, multiply 2.5% by the amount left over: 2.5% x $12,000 = $300.

Conclusion

Being good is an important part of being human. When a man does good things, like giving money to the poor or helping a disabled person, an orphan, etc., he feels good about himself.

Kindness and compassion like this keep the human race alive on the earth's surface. So, Islam puts a lot of emphasis on doing good things for other people.

Through Zakat, Islam has made it so that everyone who believes in it has to be kind. As one of the five pillars of Islam, It is a way for Muslims to share their wealth.

After all, Zakat is one way to show God how grateful we are for all the good things he has given us. It shapes our lives and makes us more compassionate toward others.