"Practice Regular Charity" Thru Payroll Deduction

Daleel On Earned Income Zakat

Allah (SWT) states in his Holy Qur’an 2:267 “O you who believe! Give away some of the good things you have earned”.  There is no authentic hadith going back to Prophet Muhammad (SAW) that supports the condition of the passage of a year regarding earned income.  There are many reports from Companions Ibn ‘Abbas, Ibn Mas’ud, and Mu’awiya, and Followers ‘Umar ibn ‘Abdul’l- ‘Aziz, al-Hasan, and az-Zuhri: A Man who earns income must pay its Zakat the day he earns it.

Hubayra says, “Ibn Mas’ud used to collect Zakat on salaries at the rate of twenty-five from each thousand,” as reported by Ibn Abi Shaba and at-Tabarani.

Mu’awiya, as head of the Islamic state, used to collect Zakat from salaries in the state administration. Many Companions lived during the era of Mu’awiya, but none of them objected to his action, Although Mu’awiya was the target of much criticism.

The view of Al-Baqir, as-Sadq, an-Nasir, the first three scholars among the descendants of the Prophet (SAW), and that of Da’ud, is that whoever earns the equivalent of the Nisab must pay Zakat immediately. They argue that this is based on general texts which oblige Zakat on money, such as the hadith, “There is 2.5% due on silver currency.” (Agreed upon)

This removes the condition of the passage of one year, according to these scholars, The Nisab need only to be fulfilled at the end of the year, as was apparent from the practices of the Prophet (SAW) and his Zakat collectors in taking Zakat at the end of the year, without keeping records at the beginning of the year.

In view of the texts on Zakat, its objectives, and the general interests of Islam and Muslims, Dr Yusuf al-Qardawi, author of Fiqh az-Zakat, A Comparative Study, (ISBN 1870582128) believes Zakat is due on earned income, whether salaries, wages, professional fees, or return on capital invested in other than trade, such as shipping, planes, and hotels, when received, without the requirement of the passage of one year. His opinion is substantiated by the following points:

1)      The requirement of the passage of one year with respect to all funds, including earned income, is not based on any sound or good hadith, which is necessary in order to derive a ruling in Shari’a, or to restrict on of its general texts. All that exists are the opinions of some Companions.

2)      Companions & Followers did not agree on requiring the passage of one year on earned income. Some oblige Zakat when earned income is received.

3)      The view that the passage of one year is not required with regard to earned income is in fact closer to the generality of the texts. Texts of the Qur’an and Sunna that oblige Zakat are general and absolute, and do not mention a condition of the passage of a year, such as the Hadiths, “Bring 2.5% of your amwal,” and “On money, 2.5% is required.” This is also supported by the general implication of the Ayat, “O you who believe! Give away some of the good things you have earned.” (2:267) Earnings in the Ayat is general and applies to trade, professions or employment. When jurists require the passage of one year with regard to Zakat on trade assets, it is only to allow for the principal to produce its earnings. The case of salaries is different. They are earned when they are received.

4)      Sound analogy also supports Dr. al-Qardawi’s view. Earned income is most similar to crops and fruits when harvested. If farmers, even those who have rented the land, are charged one-tenth or one-twentieth, why not charged employees and physicians one-fortieth of their earnings, especially since Allah (SWT) associates earnings with the produce of land in the above quoted Ayat that continues “…and of the fruits of the earth which we have produced for you”. (2:267)

5)      The requirement of the passage of one year regarding earned income implies the exemption of many highly paid employees and professionals from the obligation of Zakat. These may either expend all their earnings during the year, thus escaping totally any Zakat, or save and invest part of their earnings, (thus becoming amenable for Zakat after one year). This approach results in putting all the burden of Zakat on thrifty income earners and exempting extravagant spenders. It is improbable that our wise and just Shari’a would make it difficult for the moderate spenders while making the burden of the extravagant spenders null.

6)      The requirement of the passage of one year on earned income ends up creating contradictions not acceptable to the justice of Islam. For example, a farmer that rents his land pays Zakat on his output, while the owner of the land does not pay any Zakat on the incoming rent money? Such a contradiction cannot be reconciled except by applying Zakat on earned income regardless of the passage on one year.

7)      The obligation of Zakat on earned income is more beneficial to the poor and other deserving categories. This form of Zakat may produce huge proceeds, especially since the cost of collection is minimal and convenient for the Zakat payers (automatic Zakat thru payroll deduction), as Zakat can be deducted at the source, as done by Ibn Mas’ud, Mu’awiya, and Umar ibn ‘Abdu’l-‘Aziz.

8)      The obligation of Zakat on earned income is consistent with the spirit of Islam in nourishing the values of brotherhood and caring. The Prophet (SAW) obliged charity on Muslims out of their wealth and their earnings.  Al-Bukhari reported from Abu Musa al-Ash’ari from the Prophet (SAW), “Sadaqa is obliged on every Muslim.” His listeners asked, “O Prophet of Allah, what about the person who finds nothing to spend from?” He replied, “he must work with his hands, so he can benefit himself and give charity.” “And if he cannot find a job?” they asked. He replied, “He must help the person who is desperate for help.” They asked, “What if he cannot?” The Prophet (SAW) the answered, “He must do what is known as good and abstain from evil; this is a charity for him.” (Sahih al-Bukhari)  The exemption of those renewable incomes from obligatory Zakat for the excuse of the passage of one year allows many people to earned, spend and enjoy without sharing in the needs of others and without assigning part for the sake of Allah.

To calculate your Zakat from earned income, total up your net income after deductions, subtract the Nisab (which is the value of 85 grams of gold), then multiply that amount by .025 (2.5%). This can be paid once yearly, or divided over the number of paychecks you receive in a year, then arranged thru your employer for automatic deduction every paycheck.

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