Guidelines

Zakat on cash Money is a major bliss from Allah Almighty on mankind. Money can be in the form of gold or silver or their cash equivalents in our modern times. Money is the asset that helps individuals buy their needs, establish properties and wealth; it is the backbone of life. Allah the Almighty obligated the payment of Zakat on money as a form of showing gratitude by the rich, supporting the poor, and aiding the needy. Allah orders Prophet Muhammad: (Take, (O, Muhammad), from their wealth a Sadaqah (i.e., Zakat) by which you purify them and cause them increase, and invoke [Allah’s blessings] upon them ) [At-Tawbah: 103], Allah obliges Muslims to pay Zakat to purify and cleanse their money. Yet, he warned severe punishment to those who refuse to pay it. He says: (And those who hoard gold and silver and spend it not in the way of Allah, give them tidings of a painful punishment. The Day when it will be heated in the fire of Hell and seared therewith will be their foreheads, their flanks, and their backs, (it will be said), “This is what you hoarded for yourselves, so taste what you used to hoard.) [At-Tawbah:34 -35]. Abu Hurayra reported that Prophet (peace and blessings of Allah be upon him) says: (Any owner of gold or silver who does not pay what is due on them (i.e. Zakah), on the Day of Resurrection, plates of fire would be heated for him in the fire of Hell and with them his flank, forehead, and back will be seared. When they cool down, they will be heated again and the same process will be repeated during a day the measure of which is fifty thousand years until judgment is pronounced among the slaves and he sees his path, either to Paradise or to Hell) 3.1.1 Zakat on Cash Zakat is due on cash, as per the Committee fatwa: “The majority of the Council of Senior Scholars has decided that banknotes paper money is an independent sort of money. Thus, Saudi paper money is a sort of money and American paper money is another sort of money and thus, every form of paper money is an independent sort of money. Consequently, the following legal rulings are applied to paper money: ... Second: It is obligatory to pay Zakat on paper money, if its value reaches the least of the quorum of gold or silver, or if it reaches the quorum when added to other money and trade offers possessed by their rightful owners.” (5225) Quorum of banknotes is: The equivalent to the value of the least of the quorum of gold or silver. While silver is often cheaper than gold, so the quorum for banknotes is often the quorum for silver. Once banknote paper money reaches such minimum limit on its own or by being added to another money or trade offers, Zakat shall be due at the amount of the quarter of a tenth (2.5%), if a full lunar year elapses in the possession of its owner. If it does not reach the minimum limit, Zakat shall not be paid. If the quorum for gold today is 1000 riyals and the silver is 200 riyals, for example, then the quorum for banknotes is 200 riyals. If a lunar year elapses on a Zakat payer with his money above two hundred riyals, then he must pay Zakat, at the amount of (2.5%). The quarter of a tenth (2.5%) of the banknotes can be calculating by dividing the amount on 40. The calculation result shall be the amount due for Zakat. Thus, the owner of 25,000 riyals shall calculate his Zakat as follows: 25000 ÷ 40= 625 riyals.