Islam the way of life

The act of Zakah

This an obligatory payment given to the poor and needy which is a small percentage of your excess money combined with (the value of) your excess possessions each year. If you do not have any excess, you do not have to pay Zakah and are eligible to receive it.
The literal meaning of Zakah

Zakah literally means 'growth', 'blessing' or 'making something pure'. The Qur'an states that it is the best investment, resulting in abundant blessings and growth in this life and the Hereafter. The purification, blessings, and growth can actually take different forms, both material and spiritual.

According to the Qur'an, prophets and messengers that came before Prophet Muhammad, and their followers, were also told to give Zakah, which they did.

How Zakah is collected and distributed

Zakah is payable only by those who have reached maturity, and who have savings and jewellery worth the same or more than 80grammes of gold, that has remained unused for a whole year or more. Zakah of 2.5 percent of the value is then payable on various types of property including the amount of cash savings that have remained for a year; jewellery, precious metals.. Harvest or produce e.g. salable crops and cattle, and salable goods have various rates of Zakah. This is calculated and paid once a year according to well-established rules.

Some of the categories of people that Zakah could be distributed to include: your relations, orphans, the needy, travellers, those who ask for help. Although Zakah is only collected from Muslims, and Muslims have priority in terms of receiving it, Zakah can, according to some Muslims, be given to those who need it from amongst the non-Muslims with whom the Muslims have friendly relations or alliances. Even if non-Muslims don’t receive money from Zakah, they can be given Sadaqah, which is voluntary charity

Zakah should ideally be collected by representatives of the Caliph (Khalifa - or ‘successor’ to the Prophet and thus leader of th Muslim community), i.e. employees of the treasury, who then had the job of distributing it to the poor and needy. In the absence of a Caliph, and a Caliphate (Khilafah), Zakah can be given collectively through individuals donating it to a mosque, or an Islamic organisation or charity, and be distributed by a special committee to those who are most in need. Applications for Zakah can be made to such committees and organisations by poor Muslims and others. It can also be given directly to someone known to be in need.
Benefits

If a Muslim gives his/ her Zakah properly and regularly, then he/she is said to be purifying the rest of his/her money and possessions.

Zakah is a way of distributing wealth and possessions from the rich to the poor and needy, decreasing the gap between them. Zakah is seen as the right and property of those who are poor, and is a part of a rich Muslim person's wealth that he has no right to keep.
Ensuring that the poor and needy have money from the richer members of society, who might otherwise hoard their wealth, or only circulate it only amongst themselves, has the result that all people have money to spend and invest in new businesses, charitable and useful projects etc. There can be a general increase in people's wealth when their money is invested well. This has the knock-on effect that they can spend more, buying goods and services from others who therefore benefit. This means that the economy keeps functioning and the elusive 'economic growth' and 'economic development' that so many countries are trying to achieve can take place, at the same time as truly benefiting all sections of society.

When there is less unemployment and poverty, and more opportunity for all, the result is less stress on people, less envy and jealousy of the rich, and fewer problems in terms of physical and psychological health, as well as within families. As a result crime is reduced and there is greater security, trust and peace, and therefore happiness in society. Generosity spreads itself, and encourages good will and good relationships between people, encouraging community spirit. These influences usually bring financial benefits again, as people are more willing to invest in safe areas, with friendly contacts, where they are most likely to gain from the investment.
Zakah is seen as the correct use of the money and possessions that God has given to a person as a trust and a test. Giving Zakah is a way of acknowledging that everything belongs to God and is given by God, and a means of expressing gratefulness, thanks and love to God for what you have, by pleasing Him.

The giver of Zakah should also realise that they don't need those things that they give away, and become less dependent on and less attached to them. This should help them to become more generous in their heart. They then find it increasingly easy to give things away in regular, voluntary charity or Sadaqah, which is highly encouraged by Islam. Zakah is actually the minimum that people should give. When a person gives money and possessions away, they should be doing so because they are more attached to God and love Him more than the material things that they have. Sadaqah, or voluntary charity, need not be in the form of money or possessions. It can be physical help, guidance, information or useful knowledge, preventing oneself from doing what is evil, encouragement to do good, or even the act of smiling! Muslims are encouraged to do charitable acts secretly to ensure that their intention, is pure, rather than trying to impress other people, although less secrecy is beneficial if it would encourage others towards more good. This way a person’s heart and character may become purified from greed, miserliness, possessiveness, envy, and jealousy.

If people are truly giving for the sake of God, a person can eventually be said to have a 'big heart', because they are so generous. Therefore their soul has 'grown', through originally giving Zakah. This means that their inner spiritual heart (fu’ad) has grown, and become more dominant over the selfish desires, enabling the person to more easily reflect, in a minor way, God’s characteristics such as generosity, patience, compassion, gentleness and so on. Purity and growth of the heart, in turn, are the source of an increase or 'growth' in blessings and reward from God in this life and the Hereafter. The Qur'an says that those who purify and cause their souls to grow are the successful ones.