As the turn of the year approaches, most people are preoccupied with unfulfilled resolutions, as well as new resolutions for the following year. Whereas as a Muslim, we should be busy doing muhasabah or self-introspection. This includes remembering whether all our obligations to Allah Swt have been fulfilled? What about our year-end zakat?
What is year-end zakat? Year-end zakat is an obligation that must be completed, before the year ends. Friends, as the third pillar of Islam, zakat must be paid by all Muslims as an effort to clean their wealth, purify their souls, as well as worship to Allah Swt.
Year-end Zakat
Zakat is an act of worship by spending some of the wealth that has reached its haul, or has been acquired and stored for one year. Some of the assets are issued if they have reached the nisab and are paid at the end of the year or at the close of the book. Zakat is sourced from valuable assets that we have, such as gold and silver, business or trade results, profits from shares and investments or companies that we have, and so on.
The obligation to pay zakat is done at the end of every year, be it the lunar year or the Gregorian year. Muslims in the past used to use the Hijri calendar to calculate their annual zakat. However, in modern times some scholars agree and allow the calculation of annual zakat using the Gregorian calendar. Why? Because it can facilitate traders, entrepreneurs, and companies that use the Gregorian calendar in their bookkeeping.
Types of Year-End Zakat
Wealth has many types and ways of acquiring it. Every asset that has reached the haul and nisab, must be paid zakat. Here are some types of assets that are required to be paid zakat at the end of the year.
Zakat on Income
Zakat on income or professional zakat is zakat that comes from the salary or wages of our work. This zakat is one of the zakat mal (wealth) that must be paid if it has reached the nisab.
This type of zakat can usually be paid every month after getting a salary, but it can also be accumulated and paid at the end of the year. Thus, income zakat can also be categorized as year-end zakat.
What is the minimum income that must be paid as zakat? Based on Fatwa of the Indonesian Ulema Council (MUI) No. 3 of 2003, the nisab of income zakat is equal to the price of 85 grams of gold. Here’s how to calculate the nisab of income:
Read also: Definition of Zakat, Terms, and Types According to Islam
First, find out the current price of 1 gram of gold by visiting the Logam Mulia website. From the search results as of October 2024, the price of 1 gram of gold is Rp1,496,000.
Second, calculate whether your income has reached nisab? The current gold price multiplied by 85 grams of gold, then the result is the minimum amount of nisab for one year of income. For more details, here is the calculation:
IDR1,496,000 x 85 grams = IDR127,160,000 (one-year nisab)
IDR127,160,000 / 12 months = IDR10,597,000 (one month nisab)
From the above calculation, we find that if you have an income of at least 10 million every month, it is obligatory to pay zakat in the amount of 2.5 percent of the salary earned.
Example: A worker earns Rp11,500,000 per month, how much zakat should be paid?
It is known that the nisab is 85 grams of gold = Rp127,160,000 / 12 months = Rp10,597,000.
Because his income has reached the nisab, it is obligatory to pay zakat at 2.5 percent, namely: Rp11,500,000 x 2.5% = Rp287,500 every month.
You can also pay zakat mal every year, so just multiply it for 12 months, to be Rp287,500 x 12 = Rp3,450,000.
Zakat on Assets Owned
Zakat on assets owned is zakat that comes from valuable wealth that we own and has reached one year’s haul. These assets include gold, silver, savings, stocks and investments. Each type of asset has a different way of calculating zakat, more details will be discussed one by one.
Zakat on Gold
Zakat on gold has a minimum nisab of 85 grams. To calculate the amount of zakat that must be issued, first find out the price value of 85 grams of gold. The current gold price is Rp1,496,000 x 85 grams = Rp127,160,000. If the gold that we store has reached 85 grams or more, the zakat must be paid.
The formula for calculating gold zakat: Value of gold price exceeding nisab level x 2.5%
Example: A person owns 90 grams of gold and has reached its haul.
Nisab: 90 grams x Rp1,496,000 = Rp134,640,000
Zakat: Rp134,640,000 x 2.5% = Rp3,366,000
So the zakat that must be paid on 90 grams of gold owned is Rp3,366,000.
Zakat on Silver
The nisab of zakat on silver is 595 grams or Rp9,389,100, based on the current price of silver. If the silver that we have has reached or exceeded the nisab, then we are obliged to pay zakat. Here’s how to calculate silver zakat:
Silver zakat formula: Silver price value exceeds nisab level x 2.5%
Nisab: 595 gr x Rp15,780 = Rp9,389,100
Example: A Muslim owns silver worth Rp10,000,000 and has reached the haul, how much zakat should be paid?
Zakat: Rp10,000,000 x 2.5% = Rp250,000/year
Zakat on Savings
The money that we save is included in the assets that are subject to zakat. If the money saved has reached haul and nisab worth 85 grams of gold, then zakat must be paid. Here is how to calculate savings zakat:
The nisab of savings zakat is the same as the nisab of gold, which is 85 grams. If a Muslim has savings that have been kept for one year and have reached the nisab of Rp127,160,000, then that person is obliged to pay zakat.
Savings zakat formula: Final balance x 2.5%
Example: A Muslim has savings worth Rp132,000,000 that he has accumulated over one year. Then he is obliged to pay his zakat. The amount of zakat to be paid is as follows:
Zakat: 132.000.000 x 2,5% = 3.300.000
So the zakat that must be issued is IDR 3,300,000/year.
For Friends who save their money in conventional banks, the way to calculate zakat is (final balance-interest earned) x 2.5%. For example, if a Muslim has savings in a conventional bank with an ending balance of Rp250,000,000 and 2.01% is interest, then how much zakat is required to be paid?
Formula: (ending balance-interest) x 2.5% = 250,000,000 – 5,025,000 = 244,975,000
Zakat that must be paid: 244,975,000 x 2.5% = Rp6,124,375
So the amount of savings zakat that must be issued is IDR 6,124,375 / year.
Zakat on Stock
Year-end zakat on stocks is a zakat that must be paid by a Muslim who owns stocks and has reached haul and nisab. The nisab value of shares is the same as the zakat on income, gold, and savings, which is equivalent to 85 grams of gold or in today’s money is Rp127,160,000.
How to calculate it?
Share zakaah formula: 2.5% x (Capital Gain + Dividend)
Capital Gain is the difference in profit from the purchase price and selling price of shares. Meanwhile, dividends are profits from the company’s earnings that are distributed to shareholders.
Read also: Differences in Calculating Zakat Fitrah and Zakat Mal
Example of calculation:
If a Muslim owns some shares and on the other hand often buys and sells shares that have been running for one year, with an average value of profit earned of Rp4 million every month and the proceeds from buying and selling shares also obtained an average value of Rp6.5 million. So how much zakat is required to be paid?
It is known that the average dividend earned is Rp4,000,000/month.
Capital gain of Rp6,500,000/month
Nisab: Rp6,500,000 + Rp4,000,000 = Rp10,500,000
Nisab: 10,500,000 x 12 = 126,000,000 (has not exceeded the nisab)
Since the nisaab has not been exceeded, zakaah on shares is not obligatory.
Zakat on Asset Leasing Investment
Zakat on asset rental investment is analogous to agricultural zakat by the scholars. Therefore, the nisab is equal to the value of 520 kg of rice. Some other conditions are that it has reached haul and the rate of zakat is 10% (if there are no operational costs), and 5% (if there are operational costs).
Year-end zakat on leased assets such as land, houses, buildings, vehicles/transportation equipment (buses, cars, trucks, etc.), production machinery, and so on.
Here is how to calculate the year-end zakat on investments:
Formula:
Value of investment zakat = (Profit from asset rental – operating expenses) x 5%
Investment zakaah value = Profit from asset rental x 10%
Example: A person rents out his house for 12 million/year. The operational costs incurred to tidy up the leaking roof, replace new paint, etc., amounted to Rp2 million. So how much zakat should be paid?
known:
Asset rental price = Rp12,000,000
Operating costs = Rp2,000,000
Nisab = 520 kg x Rp13,000 = Rp6,760,000
Zakat value = Rp12,000,000 – Rp2,000,000 = Rp10,000,000
= Rp10,000,000 x 5% = Rp500,000
So the amount of zakat that must be paid is Rp500,000.
Zakat on Trade
Zakat on trade is zakat that is derived from the proceeds of buying and selling. This obligation is categorized as year-end zakat, because it must be paid after the closing of the books at the end of the Gregorian or Hijri year, depending on which calendar the trader uses. Year-end zakat on trade has several conditions that must be met. The following are the provisions of trade zakat quoted from Fiqh Zakat Contemporary Dompet Dhuafa, namely:
The goods owned are intended to be traded. However, supporting items that are not sold and bought, such as buildings, computers, cashiers, and other tools are not subject to zakaah. Capital, whether in the form of money or goods, is a trade item that is subject to zakaah. Goods have been stored for 1 year (reaching haul). It has reached the nisab, which is equivalent to 85 grams of gold or 595 grams of silver.
If you are a trader and have fulfilled the above conditions, then you are obliged to pay trade zakat. Here’s how to calculate trade zakat:
First, make sure that the nisab has been met or not by finding out the current gold price. If it has been met, then the following formula can be used to calculate the zakat.
Formula: (Capital employed + profit + receivables) – (debt due) x 2.5% = Zakat.
Example: A Muslim earns a profit of Rp60 million from trading clothes. How much is the zakat if the capital spent is Rp40 million and has a debt due of Rp20 million.
It is known:
Capital = Rp40,000,000
Profit = Rp60,000,000
Receivables = none = 0
Matured debt = Rp20,000,000
Zakat = (Rotated capital + profit + receivables) – (due debt) x 2.5%
Zakat = (40,000,000 + 60,000,000 + 0) – (20,000,000) x 2.5%
= (100.000.000 – 20.000.000) x 2,5%
= 80.000.000 x 2,5% = 20.000.000
Zakat on Livestock in Trade
What about trading livestock, how much is the zakat? If the animals that we raise are intended to be traded, then the calculation of zakat follows the calculation of trade zakat. For livestock that are bred, the way to calculate the capital is by calculating the operational costs incurred while raising and caring for the animals.
Example: A Muslim earns a profit of 100 million from selling cattle. The cost incurred in raising and caring for the cows is approximately 60 million for one year. He has no debts and does not give debts. How much zakat is required to be paid?
Nisab = 85 gr x 1,496,000 = 127,160,000 (has exceeded the nisab, so zakaah is obligatory)
Zakat = (60,000,000 + 100,000,000) x 2.5% = 4,000,000
So the zakat that he must pay is Rp4,000,000.
Company Zakat
Corporate zakat is one type of year-end zakat that must be paid every time the accounting is closed. If the company’s income has reached or exceeded the applicable nisab, it is obliged to pay zakat.
The nisab of corporate zakat is different for each type of business that is run. For companies engaged in finance, the nisab is equal to the price of 85 grams of gold and the zakat rate is 2.5 percent.
Companies engaged in mining have the same nisab and zakat rate as financial companies.
Companies engaged in fisheries and plantations nisab is worth 653 kg of rice and the zakat rate is 5-10 percent, depending on the irrigation system used.
Quoting the official website of Dompet Dhuafa, Ustaz Zul Ashfi said that for the agriculture and plantation industry, companies need to pay attention that there are only two types of agricultural crops that are subject to zakat, namely:
Grains that are staple food sources such as rice, wheat, and others. Fruits which only apply to dates and grapes. Other than these two types, crops are included in trade zakat because they are intended for buying and selling activities.
There are two ways of calculating corporate zakat, the first is by calculating all the money collected by the company:
(all the money in the company, either in cash or in the bank + the value of goods traded) x 2.5% = nominal zakat
The second way is to use the company’s assets formula as follows:
(all company assets – assets not subject to zakat such as facilities) x 2.5% = nominal zakat
Year-end Zakat at Dompet Dhuafa
Zakat funds that are empowered responsibly can be a blessing that brings benefits to the mustahik. Professionally managed zakat funds can even raise the status of mustahik to muzaki in the future.
Dompet Dhuafa stands on five program pillars (education, health, social, economic, da’wah and culture) which always aim to build social life for the better and prosperous. For that, let’s pay year-end zakat through Dompet Dhuafa. You can click the image below for easy donation!