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A Guide TO Zakat Accounting

Prepared by Dr. Hussain Hussain Shehatah Professor of Accounting Faculty of Commerce, Al-Azhar University Consultant to Al-Zakat Funds


In the Name of Allah, The Most Merciful,The Most Compassionate

Zakat in The Holy Quran


: ... ) 43 ( : Allah says : and be steadfast in prayer ,practice regular Zakat and Bow down Your heads with those who down .. ( Al-Baqara- 43 )

Zakat in THe Sunnah


: , , , , , , ( )

Zakat in Sunnah-cont.
The Messenger of Allah( peace be upon Him ) said : Islam has been built on five pillars , Testifying that there is no God but Allah and Mohammed is the messenger of Allah, performing the prayers, paying the Zakat, making, the pilgrimage to the house of Allah , and fasting Ramadan ( Buhkary and Muslim )

Zakat Accounting Topics ( Contents of the Book )


This Book deals with Fiqh and Accounting of Zakat (Alms) according to Islamic Jurisprudence . It consists of the following Topics : - Zakat Rules.( Fiqh ) . - Zakat Accounting Rules( Principles ). - Zakat Accounting Statements. - Zakat Duers.

Chapter One

Zakat Rules (Zakat Fiqh)

Zakat Meaning
Zakat means , in Language , : Blessing, Purity, Growth and Uprightness . It means in Shariah :a defined allocating amount from a defined money for an assigned people .

Zakat and Sadaqa


Zakat may called Sadaqa , Allah says : of their properties ( money) take Sadaqa , that may Purify and sanctify them and pray on there behalf.. * -The Word Sadaqah in this verse refers to Zakat . But it sometimes refers to Charity .

*-Accordingly , every Zakat is a Sadaqa And a Sadaqa may be a Zakah or a Charity .

Zakat Rules

Muslim Scholars have summarized Zakat Rules as follow : - Zakat is a Farida from Allah (obligatory ). - Zakat is a Financial Worship . - Zakat is a Believe . - Zakat is Compulsory to Muslims. - Zakat is Due to an assigned Receivers.

- Zakat is Annuity , except Zakat on Plants and Fruits , and on Rakaz . - No Zakat until Wealth exceeds Nisab - No Duality in Zakat. - Zakat affairs are the Responsibility of Government.

Due Zakat does not obsolete . - Zakat is Obligatory to Muslims any where in the world. -The Muslim who denies the Obligatory of Zakat is a Non-believer ( Kafir) , and who refuses to pay it , is a Disobeyer.
-

Zakat and Tax Differences


-Zakat is a financial Worship ,and a pillar of Islamic Religion , but Tax is imposed by the Government by Low ragardless to Religion.
- Zakat is based on Religious and Ethical Values ,but Tax mostly ignores such Values and based on monetary factors .-

- Zakat is calculated according to Fiqh Rules , but Tax is calculated according to Governmental Rules.
-

Zakatable wealth is gained from Good and Halal Sources, but Tax Revenues and Incomes may be earned from Non-Halal and Worse Sources from the sight of Islam Rules .
-

- Zakat Rules are stable and permanent for each Time and place because they excreted from Quran and Sunnah ,while Tax Rules are variable.
- Zakat purifies soul and money ,while Tax does not .

Accordingly ,: Tax is not a Zakat Zakat is not a Tax

Chapter Two

Zakat Accounting Rules

Zakat Accounting Meaning


reviewing and announcing of Zakat on money .It is governed by a group of Accounting rules, extracted from the sources of Islamic Shariah,
It mans the calculation,

Zakat Accounting Objectives


-

They are as follow: Determining the Zakat Base . Calculating the Due amount of Zakat . Preparing Zakat Statements and Reports . Distributing Due Zakat amongst its Duers.

ZAKAT ACCOUNTING RULES ( PRINCIPLES )

Zakat Accounting Rules are as Follow:

1. The Lunar Year


Zakat is calculated according to the lunar year. Counting starts when the amount of money attains the Nisab (the minimum amount on which Zakat should be paid). This includes all kinds of Zakat except Zakat on agriculture, fruits, mineral assets and Rikaz (metals found in the earth).

2. Independence of each Year:


Each Zakat year is an independent one, and Zakat on a given amount of money should not be more than once in the same year. Duality should be avoided. The Prophet (Peace be upon him) said: No duality in Zakat giving.

3 Actual or Assumed Growth:


Actual or assumed growth of an amount of money is a condition for any Zakat is to be given from this money. Therefore, Zakat is not due on fixed assets or things for personal use. This is because the condition of actual or assumed growth would not be met.

4. Zakat Base should reach Nisab


Zakat is due on money which is abounding (more than basic needs). No Zakat is due for little amounts of money. The amount of money should reach the Nisab. This guarantees that only those who have the capacity of paying will be obliged to pay.

5. Calculating Zakat on the Total or Net Zakatable Money


For every kind of money or activity there is a rule for calculation Zakat which is due on it. Some are calculated in relation to the total amount and others are calculated in relation to the net amount ( Property).

6. Grouping Money of the Same kinds


together as Zakatable Base: It is permissible to group cash money of wealth to cash money available from offers of commerce and other gained cash money, so that for all these monies there would be one Nisab and one Zakat Year.

7. Evaluating Zakatable Money according to the Current value .


Evaluating cash money of wealth and cash money from offers of commerce to define the due Zakat should be according to the current value at the time of paying Zakat. They should not be evaluated according to the historic value, cost or market, whichever is less.

Equations of calculating Zakat


They are as follows :

Receptacle of Zakat = Zakat Base = Zakatable Money .2


( Assets),( Less ) - Zakatable Liabilities which are due to be paid at the moment.

.1
.3

2. Zakatable

Money( Assets )= Assets which meet the conditions of obligatory Zakat.

3.

Zakatable Liabilities =
which are due in short time.

4. Due

Zakat = Zakat Base By Zakat Rate

Conditions of Zakatable Money They are as follows:


a. It should be a full ownership. b. It should be Growing actually or assumed

c. The completion of one Lunar Year except for Zakat on agriculture, fruits, mineral wealth or Rikaz in earth.

d. Not other kind of Zakat has been paid on the same Zakatable Money within the same year. e. Zakatable Money should exceeds Basic Needs.

f. Zakatable Money should not include a Debt which is due at the time.(short term Debts) g. Zakatabe Base should reach the

(Nisab).

Conditions of Zakatable Liabilities


They are Short Term Liabilities which are due payment according to the following conditions :

Liabilities should be related to the activity.

.a .b

b. Liabilities should be due payment during the coming year . c. Liabilities permissible should be legally .

Nisab = the minimum amount of


Due Zakat
It is equal to 85 grams of pure gold. A

gram should be evaluated according to current prices at the time of paying Zakat in the country in which the original money is located.

The Amount of Due Zakat When Zakat Base money once reaches the Nisab , the Due Zakat is calcuated as follow : Zakat Base x the price of Zakat.

The Price of Zakat = Zakat Rate


It varies according to the kind of money and activity. It ranges between 2.5% and 20% of Zakatable Base.

Executive Procedures for Calculating Zakat

Steps of Calculating Zakat


( Zakat Accounting Procedures )

Zakat should be calculated according to the following steps:

1. Defining the date completion the Lunar year. This date varies according to the circumstances of the Zakat giver ( Payer).

With the exception of Zakat on agriculture, fruits, minerals and minerals in the earth. In these cases Zakat should given at time of harvest or the acquisition of the minerals.

In the case of defending the Lunar year for the first time, the date of beginning and the date of completing should be defined according to the date of reaching the Nisab amount.

2. Different Monies owned by the Zakat Payer should be assessed at the end of year according to the rules of Zakat. From this money it should be defined on which Zakat must be given. They are called Zakatable Money ( Assets).

3. Assessment of Taxable Liabilities (deductions) which are due to be deducted from Zakatable money according to the rules of Zakat.

4. Defining the receptacle of Zakat ( Zakat Base ) by the deduction of Due Liabilities from Zakatable Money by the following equation.
The receptacle of Zakat ( Zakat Base ) = Zakatable Money Due Liabilities.

5- Calculating the Nisab as mentioned before. Each kind of Zakat has a special Nisab .

6. A comparison should made between the Zakat Base, defined in step 4 above, with Nisab defined in step 5. So as to know whether Zakat is due or not. If the Zakat Base has reached the amount of Nisab, then Zakat would be Due.

7. Define the amount which should be taken from the receptacle of Zakat ( Zakat Base ), it is as a Percentage % , it is culled the Price of Zakat , It varies from 2,5% to 20% of Zakat Base

8. Calculating the amount of Zakat by multiplying the amount of the receptacle by the amount of the price (or percentage) of Zakat. The result should be the amount of due Zakat.

9. Define who pays the due Zakat a follow :


a. For individuals and personal establishments: The individuals or the owner should pay the due Zakat.

b. For partnership: The amount of the due Zakat should be divided between the partners, each according to the percentage ofhis share in the capital of partnership.

c. For investment companies: The amount of the due Zakat should be divided on the number of shares to know the amount of Zakat due on each share. Each investor should then pay Zakat according to his ownership of shares.

d. For partnerships of labor and capital (mudarabah Sahriyyah) : The laborer (Mudarib) pay Zakat according to his share of profits. Whereas the financier (Mumawwil) should pay Zakat on the capital and the profit less the laborers share.

10. Zakat Amount should be distributed according to its duers in the light of the rules of Islamic Law (Shariah).

It is permissible to give Zakat to institutes or committees of Zakat to redirect the funds in their due activities and persons according to Islamic Law (Shariah).

Zakat Duers
Zakat Funds should be spent as mentioned in the Holy Quran:

( : 06 )

Zakat are for the Poor, and the Needly,and Those Employed to administer the funds, for those whose hearts have been recently reconciled to Truth , for those in Bondage and in Debt , In the cause of Allah , and the Wayfarer , Ordained by Allah , and Allah is full of knowledge and Wisdom . ( Al Tawbah -60 )

The Duers of Zakat as mentioned in this Verse are as f0llow : 1. The poor. 2. The needy people. 3. Those employed to administer the Funds.

4. Those whose hearts have been recently reconciled to Truth 5. Those in Bondage.

6. Those in Debt. 7. In the cause of Allah. 8. The wayfarers.

We well discuss this in more detail in chapter four

Zakat Accounting Tools and Methods

In order to calculate Zakat on money, an accountant needs the following tools and methods:

1. General Balance Sheet (Financial Position) made on the date of calculating Zakat. 2. Final Accounts for the ended year, on which Zakat is to be calculated.

3. Clarifications concerning the Balance Sheet and the final accounts, such as: - Current value of Zakatable assets. - Bad and good debts to be baid. - Bad and good debts to be collected.

- Revenue from fixed assets which are for collecting or for investment.
- And other necessary clarifications concerning calculating Zakat.

4. The price of Gold at the time when paying Zakat is due, in order to calculate the Nisab
5. Different Monies possessed by the Zakat giver should be grouped if they are of the same kind.

6.Different contemporary Fatwas concerning Zakat.


7. The guide for calculating Zakat.

8. Other accounting tools and methods which may be useful for calculating Zakat.

The diagram in the following summarizes the procedure for calculating Zakat on money.

Diagram for calculating Zakat


Starting Point

)1(

Prepare the general Balance Sheet and clarifications on it

)2(

Define and assess the Zakat assets

(3)

Define and assess liabilities which must be met

(4)

Define the receptacle of Zakat by deducing (3) from (2)(Zakat Base )

(5)

Define the Nisab according to the price of gold

(6)

Compare the receptacle of Zakat with the Nisab

(7)

Calculate the Due Zakat if the receptacle reaches the Nisab

(8)

The Due Zakat = Zakat Base By Zakat Rate

Third Chapter

Zakat Accounting Statements ( Forms)

This chapter includes a number of simplified accounting Statements to calculate Zakat on money and other activities in the light of information mentioned in the previous chapters.

These statements are meant to be used as a guide for accountants when assessing the receptacle of Zakat, and when advising the Zakat giver, whether he is an owner of a personal establishment or a partner with others in a private company or a share holder in an investment company.

The Statements are as follows: 1. A Statement to calculate Zakat on wealth in cash. 2. A Statement to calculate Zakat on Commerce and Industrial Wealth.

3. A Statement to calculate Zakat Plants and Fruits.


4. A Statement to calculate Zakat on Cattle.

on

5. A Statement to calculate Zakat on mineral and marine wealth, and minerals in the earth.
6. A Statement to calculate Zakat on Revenues from Investment in Fixed Assets.

7. A Statement to calculate Zakat on revenue from Labor.


8. A Statement to calculate Zakat on revenue from Freelance Work.

(1)
Zakat Accounting Statements on Cash wealth

) )

Zakat on cash wealth includes: Banknotes, Coins, Silver, Gold Money as well as Ingots of gold, Current Accounts in Banks and Investment Accounts in Banks and Investments in Shares and Bonds and Like Investments.

The Nisab for cash wealth is 85 grams of pure gold, or its equivalent in cash, or 595 grams of pure silver. The Islamic Commission for Research has recommended to use the Nisab in gold.

The Zakat Rate on Cash Wealth is 2.5%


The Amount of Due Zakat= Zakat Base by Zakat Rate

The calculation steps are as follows:

a. Define the time when the Zakat is due (Al-Hawl), which starts from the time when the amount of money reaches Nisab.

b. Define all items of Cash Wealth, on which Zakat must be paid (Zakatable Money).

c. Asset all items of cash wealth according to market value at the time when Zakat is due.

d. Deduct all Liabilities on the Zakat giver from his cash wealth so that to know the receptacle of Zakat.( Zakat Base ).

e. Compare between the receptacle of Zakat and the Nisab, which is equivalent to 85 grams of gold according to the market value. If the receptacle reaches the Nisab, then Zakat is due to be paid.

f. Calculate the amount of Zakat by multiplying the receptacle by the price of Zakat, which is 2.5%.

The following statement shows an example of calculating Zakat on cash wealth:

Zakat Statement on Cash Wealth for the year ended / /

Item
* Elements of cash wealth:
- Saudi ryal - American Dollar (after assessing according to market price) - Gold and silver monies (after defining weight or number)

Sub- Total total

** ** **

Zakat Statement on Cash Wealth for the year ended / / (Continue)

Item
- Pound Sterling (after assessing according to market price) - Ingots of gold and silver (after defining weight) - Investment bonds (after assessing according to market price) - Jewelry for investment (after assessing according to market price) - Jewelry which exceeds the amount normally used for beautification.

Sub- Total total

**

**
**
**

**

Zakat Statement 0n Cash Wealth for the year ended / / (Continue)

Item
*Total Zakat cash money Deduced: Debts which must be paid now by the Zakat giver (if any)

Sub- Total total

***
*** ***

* Cash wealth Zakat Receptacle


Compare with the Nisab (the equivalent to 85 grams of gold) if receptacle reaches the Nisab, then Zakat should be calculated as follows:
* Amount of Zakat =

Zakat receptacle x 2.5% =

***

(2) Accounting Zakat Statements on Trading and Industrial Wealth ) (

This Zakat is imposed on Wealth for Trading which is to be bought or sold with the intention of Trading to earn a profit.

Goods (properties ) for acquisition and personal use and not for selling or trade are not Zakatable. No Zakat, therefore, are due on them, as they are not added to Zakat Base Fixed Assets and Personal Assets for use

such as :

The definition of receptacle of Zakat (Zakat Base ) on Wealth for trading and calculating their amount should be done according to the following steps:

a) Define the end of the Zakat year. Which may be the same date as the end of the financial year for an establishment or a company. b) Define and assess the elements of Zakat such as goods, duties, documents of payment, investments in stock for trading and cash in banks and cash in safe ..etc.

c) Define and assess the elements of immediate current liabilities which are due for payment from the Zakatable Wealth. d) Define the Receptacle of Zakat ( Zakat Base ) by deducing the current liabilities (item c) from the Zakat assets (item b) and add any earned money (if applicable).

e) Define the amount of the Nisab, which is the equivalent to 85 grams of gold , and then compare with the receptacle of Zakat
f) Calculate the amount of Zakat. If the receptacle reaches the Nisab, Zakat should be calculated as 2.5% in the case of a lunar year, and 2.577% in the case of a solar year.

The following statement shows a form for calculating Zakat on Trading Wealth and the question of other trading activities such as industrial activity:

Zakat Statement on Trading and Industry Wealth for the year ended / /

Item
* Zakatable Wealth for trading: such as:
Goods for Trading Duties / documents of payment Investments for trade. Cash in banks. Cash in safe.

Sub- Total total

** ** ** ** **
****

Zakat Statement onTrading and Industry Wealth for the year ended / /

Item
* Deduced: Short Term Liabilities: such as:

Sub- Total total

Debtors / documents of payment(to be paid). - Suppliers. - Loans due. - Other Short Term Liabilities.

** ** ** **
****

Zakat Statement onTrading and Industry Wealth for the year ended / / (Continue)

Item
* Net Zakat Wealth for Trade Added: Earned money (if any).
*The receptacle of Zakat on wealth for trade.( Zakat Base )

Sub- Total total

*** ***

Compare with the Nisab (the equivalent to 85 grams of gold) if the Zakat Base reaches the Nisab, Zakat should be calculated as follows:
* Amount of Due Zakat =

***

Zakat Base x 2.5% =

***

(3)

Zakat Accounting Statement on Plants and fruits ) )

What is meant by agriculture is anything which comes out of the earth and is planted by seeds, from which man, animal and bird feed. And, by fruits everything which trees carry which is to be eaten.

Zakat on agriculture and fruits are due at the time of harvest or collecting, according to Allahs instruction: ) : ( but render the dues that are proper on the day that harvest is gathered
(Al-Anam, or Cattle, 141)

Therefore, if an area of land produces more then one crop within the year, its owner should render zakat on each crop separately.

The following are steps of Calculating the Zakat of Zakat on agriculture and fruits and calculating their Due amounts:

a) Measure the total production of the land either by production quantity or cash. b) Define the expenses on the production, if the opinion adopted is that which says that expenses should be deduced as far as they do not exceed the third, which is the opinion of the Sixth Fiqh Seminar of

Barakah.

c) Define the Zakat Base by deducing (item b) from the (item c).
d) Define the amount of the Nisab, which is equivalent to 5 Awsaq, or the equvalent to 50 Egyptian Kaylah, or 653 kg of wheat
d) Define the Zakat Rate according to the Method of Watering , 5% or 10% .

e) Calculate the amount of Zakat as follows: - In the case of watering by cost: Amount of Zakat = Zakat Base x 5% = - In the case of watering without cost: Amount of Zakat = Zakat Base x 10% =

The following statement shows a form for calculating Zakat on Plants and fruits:

Zakat Statement on Plants and fruits for the crop Item


* The value of the crop: - Deduced: - The expenses of farming (with the condition that they do not exceed one third of the value of the crop). - The cost of farming. - Governmental taxes. - Other expenses related to the crop. Net value of the crop.
Deduced: Currently due debts (if any). Sub- Total total
***

**

** ** **

**

*** **

Zakat Statement on Plants and Fruits for the crop(Continue)

Item
* Zakat Base of Plants and fruits. Compare with the Nisab, the value of which is 5 Awsaq or their equivalent. if the Zakat Base reaches the Nisab, Zakat should be calculated as follows:

Sub- Total total

***

Amount of Due Zakat: * in the case of watering by cost: Zakat Base x 5% = * in the case of watering without cost: Zakat Base x 10% = * The amount of Zakat should be taken from the crop.

(4)

An Accounting Statement for Zakat on Cattle


) )

What is meant by cattle is camels, cows, sheep. Zakat is due on them only if they are bred for multiplication on cattle differs according to the kind of species. For camels it is five, for sheep it is forty, whereas for cows it is thirty. One should refer to Fikh books for more details.

The following steps should be followed to assess the receptacle of Zakat on cattle and to calculate its value at the end of the year:

a) Define the number of cattle, deducing the working animals and the ones ready for trade (for which there is a different way of calculating Zakat.

b) Compare the number with Nisab. If it is less than the Nisab, then no Zakat is due.
c) Define which category the number falls into, in order to define the amount of due Zakat.

d) Define the Zakat due according to tables in Fiqh books.


We include on next Slide a form for calculating the Zakat on cattle.

Zakat Statement on Cattle for the year ended / /

Item
* The total amount of cattle: Deduced: - Working animals (exempted). - Animals prepared for trade(there is a different system of calculating their Zakat).
* The receptacle for Zakat on cattle.

Camels **

Cows

Sheep

* *

**

**

**

Zakat Statement on Cattle for the year ended / / Item


The receptacle for Zakat on cattle.
Camels Cows Sheep

**

**

* Compare with the Nisab (5 camels, 30 cows, 40 sheep), if the receptacle reaches the Nisab: * Calculate the amount of Zakat according to the relevant schedules.

**

(5) An Accounting Statement for Zakat on mineral and marine wealth and minerals in the earth
) (

Mineral and marine wealth include anything of value which is brought out from the earth or the bottom of rivers, seas or oceans. Minerals in earth (Rikaz) are treasures which are buried in the earth.

The Nisab for minerals and marine wealth is the same as the Nisab for cash wealth, i.e., the equivalent to 85 grams of gold. On the other hand, Zakat is due on minerals in the earth regardless of their quantity. For both categories there is no need to wait until a year ends.

The following steps are for defining the receptacle of Zakat on minerals and marine wealth:

a) Define the net production from the earth or sea, on which Zakat must be paid. b) Compare the net production with the Nisab (the equivalent to 85 grams of gold) in the case of mineral wealth. For Rikaz there is no Nisab.

c) Calculate the amount of Zakat, if the receptacle reaches the Nisab, the basis of 2.5% for minerals and 20% for Rikaz. We include on next slide a form for calculating the Zakat on mineral and marine wealth.

Zakat Statement on mineral wealth for operation number dated on

Item
* Net value of mineral and marine wealth:*
- Net value of mineral wealth. - Net value of marine wealth. Net value of mineral and marine wealth.

Sub- Total total

** ** **

Zakat Stateent on mineral wealth for operation number dated on(Continue)

Item
Net value of mineral and marine wealth. Compare the Nisab (85 grams of gold) with the receptacle of Zakat. If the receptacle reaches the Nisab, then Zakat should be calculated as follows: * Amount of Zakat = Zakat Base x 2.5% =

Sub- Total total

**

* Zakat on mineral and marine wealth after the completion of production sorting, purification or cleaning and preparation for sale. Machinery, manpower and other expenses of production are not be deduced.

6 An Accounting Statement for Zakat on revenue of Fixed Assets


) (

It is a Zakat on revenue from investing Fixed Assets reoccurring, such as real estate, cars and others.

No Zakat is due on the actual assets because they are of the same category as assets obtained for establishments (fixed assets). Zakat, however is due on their revenue once these revenues reach the Nisab, after deducing actually paid expenses and debts which are currently due.

Receptacle of Zakat on investment assets is calculated by deducing actually paid expenses and debts which are currently due from revenue Due Zakat is calculated according to the following steps :

a) Define the total annual revenue at the end of year.

b) Define all expenses of getting the revenue.

c) Deduce expenses which are actually paid from the total revenue to define the net revenue, on which Zakat must be paid.

d) Deduce currently due debts which the Zakat giver must pay and also the cost of original matters, if they were not deduced from any other receptacle of Zakat.

e) The net of all the above should be added to any cash and trade goods owned by the Zakat giver and on which no Zakat is paid at the end of the year to ascertain the receptacle.(Zakat Base ) .

f) Compare receptacle (e) with the Nisab, which is the equivalent to 85 grams of gold. If the receptacle reaches the Nisab, then Zakat should be calculated on the basis of 2.5%, which is the chosen opinion for the present guide.

The Following is a Statement for Zakat on Revenue from Investment Fixed Assets

Zakat Statement on Revenue from Fixed Assets in the year which is ending / / (Continue)

Item
* Total annual revenue
* Deduce:

Sub- Total total

***

- Costs of and expenses which are related to the revenue and which are actually paid.

**

****

Zakat Statement on Revenue from Investment Fixed Assets in the year which is ending / / (Continue)

Item
* Deduce:

Sub- Total total

- The expenses of the original matter which is actually paid. - Debts which are due currently.
Receptacle of Zakat on revenue from investment assets( Zakat Base )

**
**
***

****

Zakat Statement on Revenue from Investment Fixed Assets in the year which is ending / / (Continue) Item * Add cash, earned money, net of receptacle of trade if no Zakat is paid on them. Receptacle of Zakat ( Zakat Base ) Compare with the Nisab (the equivalent to 85 grams of gold) when receptacle reaches the Nisab, Zakat is as follows:
The Amount of due Zakat =
Sub- Total total

**
***

Zakat Base x 2.5%

7. An Accounting Statement for Zakat on revenue from Work ) (

This category includes wages, salaries, income from freelance work and won money. Zakat must paid on what remains of this money at the end of the year by adding it to other monies owned by the Zakat giver when calculating the Nisab and the Zakat year.

The following are the steps to define the receptacle of Zakat and to calculate what is due at the end of year:

a) Define what remains from the revenue at the end of the year after deducing what is actually paid from costs of basic needs and after paying outstanding debts, if there were any which were not deduced from other receptacles of Zakat.

b) Compare what remains in step (a) with the Nisab (85 grams of gold) to know whether Zakat is due or not. c) Calculate the amount of Zakat if the receptacle reaches the Nisab, on the basis of 2.5%.

The Following is a Statement for calculating Zakat on revenue from work.

Zakat Statement on Revenue from Work in the year which is ending / /

Item
* Total Salary during the year * Total other revenues during the year * Deduce: - Costs of basic needs which are actually paid. - Costs of acquiring the revenue which is actually paid. - Paid Debts.

Sub- Total total

** ** ** ** ** ***

***

Zakat Statement on Revenue from Work in the year which is ending / / (Continue)

Item
Net salary and other revenues
* Add: Other cash monies (if there are any) on which no Zakat is paid.

Sub- Total total

** **

Receptacle Of Zakat( Zakat Base )

****

Zakat Statement on Revenue from Work in the year which is ending / / (Continue)

Item
Compare with the Nisab (the equivalent to 85 grams of gold), If the receptacle reaches the Nisab, then Zakat is calculated as follows:

Sub- Total total

Amount of Zakat due =


Zakat Base x 2.5% =

(8)

An Accounting Statement of Zakat on revenue from Freelance Professions ) (

The following are the steps to define and measure the receptacle of Zakat on revenue from freelance professions:

a) The professional should define a date for ending the Zakat year, which may be the end of the financial year for example.
b) Calculate all direct revenues from practicing the profession from the beginning to the end of the Zakat year.

c) Define expenses and costs which were actually spent in order to get the revenue from practicing the profession.

d) Define the basic needs for the Zakat giver and his dependants which were actually spent during the year.

e) Define the debts which were paid by the Zakat giver during the year (if there were any).

f) Define the receptacle of Zakat by deducing (b, c, d, e,) from (a).

g) Compare the receptacle from the previous step with the Nisab (85 grams of gold).
h) Calculate the amount of Zakat if the receptacle reaches the Nisab on the basis of 2.5%.

A Statement for calculating Zakat on revenue from freelance professions is on next slide. A form for calculating Zakat on revenue from freelance professions is on next slide.

Zakat Statement on Revenue from Freelance Professions in the year which is ending / /

Item
* Total revenues during the year
* Deduce:

Sub- Total total

** ** **

- Costs of practicing the profession. - Costs of basic needs of the Zakat giver and his dependants, which are actually paid.
* Deduce:

**

- Paid debts

** **

Zakat Statement on Revenue from Freelance Professions in the year which is ending / / (Continue)

Item
Receptacle of Zakat: ( Zakat Base)

Sub- Total total ****

Compare with the Nisab (the equivalent to 85 grams of gold), If the receptacle reaches the Nisab, then the amount of Zakat is as follows:
The Amount of Zakat due = Zakat Base x 2.5% =

CHAPTER FOUR

ZAKAT DUERES MASARIF AL-ZAKAT

Zakat Duers in Quran


: [ : 06] .

Zakat are for the Poor, and the Needly,and Those Employed to administer the funds, for those whose hearts have been recently reconciled to Truth , for those in Bondage and in Debt , In the cause of Allah , and the Wayfarer , Ordained by Allah , and Allah is full of knowledge and Wisdom . ( Al Tawbah -60 )

Zakat Duers ( Masarif )


The Duers of Zakat as mentioned in the Holy Quran are as f0llow : 1. The Poor.Those are under the standard of Living ,i.e. They suffer in finding the essencials of basic live . 2. The Needy people: Those are under the normal standard of live . 3. Those employed to administer the Funds.

Zakat Duers- cont.

4. Those whose hearts have Been

recently reconciled to Truth and become Muslim.

5. Those in Bondage., such as to free


Muslim Prisoners .

6. Those in Debt: such as those whom are Debaters and unable to pay their Debts . 7. In the cause of Allah: for Gihad to make the word of Allah is the Hiarer , and who Fight for Islam

8- The Wayfarer : Travellers Whom their Money has been lost oir finished .

Zakat Duers in The Sunnah


: ) .... ... (
The Prophet ( PBUH. ) said : Take from the Rich among them and paid it to the Poor among them .( related by Moslim)

Zakat Duers Rules


Muslim Scholars have summarized the main Rules of Zakat Dures as follow : 1- The Poverty : those under Living Standard 2- The Needy : those who need for satisfy the essentials of Living

3- Zakat Funds should not be paid to rich people or to any person able to work . 4- Zakat Funds should not be given to Relatives whom the Zakat payer is compulsory to spend, such as Parents 5- It is permitted to transfer Zakat Funds from place to another for Poor Relatives.

6- It is permitted to give Zakat Funds to the following : * Poor Students * Poor Silly People * Poor Relatives * Poor Coming to Marriage * Poor Orphans

7- It is permitted for the Wife to give here Zakat Fund to here poor Husband and it is not permitted for the Husband to give his Wife his Zakat Fund . 8- It is permitted to give Zakat Funds to Social and Religious Societies

9- It is permitted to transfer Zakat Funds to Mugahideen ( Holy Strugglers for the cause of Allah ) abroad . 10-It is permitted to pay Zakat Funds to Islamic Societies and Establishments which struggle against the Enemies of Islam.

11- It is allowed to pay Zakat in Advance but not permitted to delay it except there is a Legistrate Necessity . 12- When you are intended to pay Zakat you should to make Niyya and pray Allah and Praise Him .

Finished
Praise may be to Allah

Zakat Accounting Glossary


Compiled By
Dr. Hussien Hussien Shehata Professor of Accounting Al-Azhar University

Zakat Zakat Rules Zakat Concepts


Zakat Principles Zakat Base

( )

Zakat Rate
Zakat Forms

( )

Zakat Report Zakat Payer Zakat Rates Zakat Law Zakat Amount Zakat Reward Zakat Collection Zakat Payment Zakat Receipts

) (

Zakat Payers Zakat Duers Zakat Evaders ) ( Zakat Denier ) ( Zakat Administrator Zakat Authority Unit Zakat Authority Agent Zakat Memorandum Zakat Scholars

Zakat Accountants Zakat Shariah Auditor Zakat Card Zakat File Zakat Period Zakat Index Zakat Standards Zakat Base Zakat Laws

Zakat Nisab Zakat Due Free form Zakat Pre-paid Zakat Fore ward Zakat Zakatable Zakatable Base Zakatable Wealth Zakatable Rate

( )

Zakatable Revenues Zakatable File Zakatable Card Zakatable Deductions Zakatable Allowances Zakatabl Limit Zakatable Net Wealth Zakat System Zakat System Units

Zakat System Parts Zakat on Money Zakat on Income Zakat on Revenues Zakat on Cash Money Zakat on Commercial Wealth Zakat on Industrial Wealth Zakat on Real Estate Wealth Zakat on Livestock Zakat on Plants and Fruits

Zakat on Livestock Zakat on Plants and Fruits Zakat on Salaries Zakat on Investment in Real Estate Properties Zakat on Revenues From Real Estate Properties Zakat on Revenues from Non-Professional

Zakat on Jewelry Zakat on Debts

Zakat on Stocks and Bonds Zakat Al-Mustaghalat Zakat Accountant Zakat Accounting Books Zakat Accounting Records Zakat Accounting Concepts

Zakat Accounting Reports Zakat Accounting Principles Zakat Accounting Procedures Zakat Accounting Schedules Zakat Accounting Statements


Zakat Accounting Operations Zakat Accounting Techniques Zakat Accounting Methods Zakat Investigations Zakat Appraisal /

Zakat Determination Zakat Assessment Zakat Measurement

Zakat Reduction Zakat Declaration Zakat Estimation ) ( Zakat Subjective Evaluation Zakat Judgment Zakat Acception Zakat Declaration Adjustments Zakat Controller

Zakat Auditor ( ) Zakat Investigator Zakat Inspector Zakat Annual Report Zakat Position Zakat Forms Zakat Shariah Report Zakat Establishment Zakat Affairs House

) ( Zakat Shariah Authority Committee Zakat Scholar Zakat Fiqh Zakat in Quran Zakat in Al-Sunnah

Zakat Receivers

Zakat Receivers
Zakat Receivers. Zakat Duers The Poor The needy The Administer of Funds Whose Hearts have been reconciled to Truth

Those in Bondage Those in Debt In The Cause of Allah Wayfarer

The Holy Quran Tradition A Verse of the Correct Hadith Islamic Jurisprudence Legitimate=Halal Forbidden=Haram

Finished
Praise be to Allah