Ramadan will start on or around April 12 and last until around May 11, with Eid-al Fitr likely to fall on Wednesday, May 12
Many Muslims choose to give their Zakat (wealth tax) during Ramadan as giving charity in this month guarantees greater rewards.
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Zakat requires Muslims to donate the equivalent of 2.5 per cent of their qualifying assets to charity to support people in need within their community.
How to Calculate Zakat
You only need to pay Zakat if your overall wealth is equal to or above the wealth threshold, called the Nisab. This Nisab value can change daily, so it’s important to check with your local mosque or Islamic group.
Calculate everything you own, inclusive of both money and assets
Calculate everything you owe and deduct this amount
Work out the balance and check it against the Nisab value
If it is above the Nisab value, work out 2.5 per cent of this to find out your Zakat amount
Zakatable and Non-Zakatable assets
The general rule of thumb is that an asset is Zakatable if you have complete ownership of it, the asset is productive, and the wealth is equivalent to the current Nisab or more.
Non-Zakatable assets include money owed to a business for services, prepaid expenses, fixtures and fittings, property and equipment; Property you live in with no intention to profit from; Any other metals apart from gold and silver; Inherited money and assets which you do not currently have access to.
When Should You Pay your Zakat?
You will have a ‘Zakat due date’, which is the date that your wealth equalled or surpassed the Nisab value.
This date is also known as the Zakat anniversary and is the day on which you should pay your Zakat annually.
However, it is also encouraged to pay in advance of your specific date in order to make the most of all the spiritual benefits and blessings of Ramadan.
The Nisab will vary each day, so it’s important to remember to check the Nisab value each year your Zakat is due, as you may not qualify for paying Zakat if your wealth becomes less than this threshold.
