1. Nisab, Rates & Issues Shari’ah Principles on Zakat Calculation:
Dr. Mustafa Omar Mohammed

2. Outline Introduction Zakatable Assets Zakat on livestock2
Zakat on livestock
Zakat on Gold and Silver
Zakat on Business Inventory 1
Zakatable Assets 3
Zakat on Agriculture
Zakat on labor 4
Issues

3. Introduction
Zakat is multi-dimensional: religious, social, economic, spiritual. Hence the issue of ijtihad
In embodies joint rights [Allah, the payer and the beneficiaries]
Inculcates giving behavior& and other positive values

4. Zakatable Assets 1 2 Undivided and absolute right of ownership
[Implications: assets without specific owner, assets in public trust-mosques, waqf, unlawful wealth, Zakat on debts, grants and employee savings, etc 3 4
Growing assets
Reaching Nisab 5 6 7
Al-Hawl
In excess of needs
Freedom from debt

5. Zakat on Livestock
The prophet s.a.w provided nisab and rates for sheep, camel and cows
Khalifah Umar r.a. added horse to the list, he collected 1 dinar per horse

6. Zakat calculation on Sheep, camel and cow
Must meet the nisab
The passage of lunar calendar year
Should be pastured naturally [cost-free]
Should not be animals used for work

7. Zakatability of baby animals?
Zakat calculation on Sheep, camel and cow
Camel
5-9
1 sheep
10-14
2 sheep
15-19
3 sheep
20-24
4 sheep
25-35
1-2 yrs 1 FC
----
Above120
Additional 50, 3-4 yrs FC
Additional 40, 2-3 yrs FC
Sheep
Nisab
Rate
1-39
No Zakat
40-120
1 sheep
2 sheep
3 sheep
Above 300
Additional 100, 1 sheep
Zakatability of baby animals?

8. Ratios: 5 camels: 40 sheep: 30 cows
Zakat calculation on Sheep, camel and cow
Cow
Nisab
Rate
1-29
No Zakat
30-
Above 120
Additional 30, 1 yr cow
Additional 40, 1cow
Ratios: 5 camels: 40 sheep: 30 cows

9. Zakat calculation on Gold and Silver
Nisab
Rate
85 grams of gold
2.5 %
595 grams of silver
Exemptions include:
ladies jewelries for personal use not as al-Rahn
Men’s uses for medical reasons, e.g., teeth

10. Zakat calculation on Business Inventories
Nisab
Rate
85 grams of gold
2.5 %
595 grams of silver
Business Inventories include:
Final goods and services
Financial assets [Securities, shares, unit trusts]

11. Zakat calculation on Business Inventories
Approaches
Net Current Asset
Net Growing Capital
Current Assets less Current Liabilities
Adjustment by adding short term debts and reducing long term debts
Zakat payable= 2.5% x [Muslim share ownership]
Zakat on shares= 2.5% x [Market value per share x quantity of shares]
Zakat on Sukuk= 2.5% x [Market value per Sukuk x quantity of Sukuk]

12. Zakat on Labor Nisab of gold and silver Rate at 2.5% on annual income
Deducted at source

13. Zakat on Labor No Items Amount (RM) 1 Annual gross income 2 Deductions3
Personal needs
8000 4
Expenditure per wife
3000 5
Expenditure per child
1000 6
Expenditure to Parents 7
Contributions to EPF (11% annually) 8
Contributions to charity organizations 9
Total Deductions 10
Total zakat payable

14. ISSUES Lack of awareness Lack of effective management Lack of trust
Lack of transparency
Variations of fiqh opinions

15. Thank You
Wa Allah A’Lam