Due Zakat on money:

Money here refers to gold and silver in addition to all banknotes coins, regardless of whether it is a local or foreign currency.

The Obligation of Due Zakat on Money:

The obligation of Zakat on money is proved in the Noble Book, Sunnah and by the consensus of all Muslim scholars. As for the noble Book. Allah the Almighty says:

       "…and (so do) the ones who hoard gold and silver and do not expend them in the way of Allah. Then give them the tidings of a painful torment."(At-Tawbah:34)

In the Sunnah, we have the saying of the Prophet (PBUH): "He who owns gold or silver and does not pay what is due on him, when the Day of Resurrection would come, plates of fire would be beaten out for him; these would then be heated in the fire of Hell and his sides, his forehead and his back would be cauterized with them."  ( Reported by Muslim.)

All Muslims unanimously agreed upon the obligation of Zakat on gold and silver. By the same token all the rest of banknotes are coins which are counted as cash money in all countries and cities are subject to Zakat payment.

In order to pay Zakat on money, certain preconditions should be observed, such as amounting to the Nisab, passage of one lunar year and absolute ownership. As for the payer, he should be a Muslim and free.

How to pay Zakat on money:

The due Nisab of money is 85 gm of gold [58 gm of gold multiplied by the price of one gm = the Nisab].

If the cash money amounts to Nisab, we should pay Zakat at the rate of (2.5%).

For example, somebody may ask the following QUESTION: Suppose that somebody owns ‘10.000 Dirhams’ and one lunar year has passed while it was still in his possession, what is the due amount of Zakat?

The answer is:

Let us suppose that the price of one gm of gold is ‘47 Dirhams’, and the Nisab should be ‘85gm multiplied by 47 Dirams’ =3995 Dirhams. This is the nisab of money, upon which Zakat is due. Then, the Zakat would be: [10.000 multiplied by 2.5%] =250Dirhams. This is the due sum of money that should be paid as Zakat after the passage of one lunar year.

Due Zakat on Jewelry:

The majority of the scholars, except for Abu Hanifa, agreed that there is no due Zakat on women's jewelry, which is kept for personal use. Ash-Shafi'i, on the other hand, sees that jewelry should not exceed the usual amount possessed by other women of the same social class. If the value exceeds this amount, Zakat should be paid on this because this is an act of saving and holding. In addition, it is prohibited for men to keep gold for ornaments, as well as jewelry which is kept for use when it is deemed necessary. Also it is prohibited to keep for personal use any articles, or vessels made of gold, if otherwise, we should pay Zakat on them.

How to Pay Zakat on Jewelry:  

The preconditions concerning due Zakat on money stated earlier, are also applicable to paying Zakat on Jewelry. However, it is worth mentioning that the type of gold on which Zakat should be paid, is that of pure gold, namely ‘24 standards’. Thus, if the amount of pure gold amounted to ‘85 gm’, then Zakat should be paid.   

In order to calculate Zakat on the type of gold of 22 or 21 standards or the like, then pure gold should be estimated first, through the following mathematical calculation: [the weight of gold multiplied by its standard of gold divided by 24 = the pure amount of gold].

For Example: A woman has gold of ‘21’ standard, and it     weighs (200) gm, so what is the amount of due Zakat on it?

The amount of due Zakat on it is: 200 multiplied by 21 divided by 24 = 175gm pure gold.

Thereupon, her Zakat would be [the pure weight of gold multiplied by the value of one pure gm, say for example (50 Dirhams) multiplied by 2.5% = the amount of Zakat.

As a result, the due Zakat on this woman is calculated according to as follows: 175gm multiplied by 50 multiplied by 2.5% =218.75Dirhams.

Granted Money:

This refers to the money granted to anybody, and does not belong to him. This includes, the money granted by a will, inheritance, gift, dowry, or compensation of Khul' and the like. Also this includes the money taken as a salary or reward. To pay Zakat in this case, in case the amount of money equals Nisab, one should wait for one lunar year to pass, and then pays it.