I am about to say something outright; whether you like it or not, I have no intention of considering that. Sometimes, it might be explosive. There’s no point in keeping quiet, and it is impossible not to say it! There are many Z.Ts amongst us! Yes, they do exist! Do you know who a Z.T. is?

Those who, despite meeting all the religious conditions for giving Zakat, pretend as if they are unaware of it—these people are the true Z.T.s. or Zakat Thieves. They believe that they will never have to give Zakat because they assume that wealth has not accumulated in their hands to the necessary extent. They think that Zakat is only obligatory for landlords, the wealthy, traders, and those who hoard money. Some so-called pious individuals still carefully carry the belief that “Zakat is not for people like us.”

Again, let me say something openly: One does not have to be visibly rich or appear prosperous to be obligated to pay Zakat. Nor does one have to be someone who has no financial difficulties and plenty of surplus wealth. There are only two conditions. I will explain them as we go along, so pay close attention. The ones who should particularly take note are salaried employees. Many employees are liable for Zakat in large amounts, but they either do not know it or make no effort to find out.

So, does salary require Zakat? How much is the Zakat on salary? Please do not ask such questions! Just as tax is not calculated at a fixed rate for a fixed salary, Zakat is not a fixed percentage of salary either. Zakat is due on money—whether it is from salary, proceeds from selling property, remuneration, honorarium, royalty, received as a gift, sent by a relative, or even from selling gold. The key question is: Do you have money that you own and can call yours? If so, then let’s talk.

Should Zakat be given as soon as money is in hand? No. It is required only if two conditions are met:

1. The amount must reach the Nisab (minimum threshold).

2. It must be in your possession for one full year.

What is the Nisab?

This is a dynamic figure, not fixed. It fluctuates based on the market value of gold and silver at any given time. If Nisab were calculated based on gold, the threshold would be higher, and as a result, fewer people would be obligated to pay Zakat. Beneficiaries of Zakat would remain in deprivation. Therefore, using silver as a benchmark is more beneficiary-friendly. The Nisab based on silver is the equivalent of 595 grams of silver.

If you own an amount equal to half of the price of 595 grams of silver, and it remains in your possession for a year, you are obligated to pay Zakat in full.

Understanding Zakat Eligibility:

1. If someone had money in their possession for a year but it never reached the Nisab threshold, is Zakat required? No.

2. If the Nisab threshold was met but spent before completing a year, is Zakat required? No.

3. What if the money reached the Nisab threshold but was spent just 10 days before the full year? Yes, Zakat is due.

4. This is because Zakat is calculated according to the Islamic (Hijri) calendar, which is 11 days shorter than the Gregorian calendar. As a result, the one-year period for Zakat completes sooner than one might think.

What about salaried employees?

Before discussing their Zakat obligations, let’s categorize them into three groups:

a. Those who spend their salary as soon as they receive it.

b. Those who live extremely frugally and save carefully.

c. A mixed group of both habits.

So, is there Zakat on salary? The second category—those who save—will quickly reach Nisab and have a significant amount of Zakat due. The third group will reach Nisab later and have a moderate amount of Zakat to pay. But the first category—those who spend everything—regardless of how much they earn, will not have Zakat to pay because they never retain money for a full year.

Now, let’s discuss specific Zakat-liable assets for employees. While this discussion is framed within an Indian context, the fundamental principles of Zakat calculation remain relevant across the world. In an increasingly globalized financial landscape, salaried individuals—whether in India, the Middle East, Southeast Asia, Europe, or North America—engage with similar financial instruments, such as pension funds, insurance schemes, and long-term savings plans. Understanding how Zakat applies to these modern forms of wealth accumulation ensures that one fulfills their obligation responsibly, regardless of geographic location.

1. Provident Fund (P.F.)

Government, aided, and private institutions implement this savings system to ensure financial stability after retirement. A minimum contribution is mandatory based on salary, and employees can choose to contribute more.

The first step is to determine when the cumulative contributions reached the Nisab threshold. Next, calculate when a full year has passed since then. Zakat is due on that amount. Since contributions continue monthly, Zakat will be due regularly in small amounts. If paying in small installments is inconvenient, one can pay the entire year’s Zakat in advance. The only condition is that the recipient must still be eligible for Zakat by the end of the year.

Withdrawal of Provident Fund:

• If it is withdrawn with a repayment condition (loan format): It remains part of one’s assets, so Zakat is due.

• If it is withdrawn without a repayment condition and used for expenses like buying a vehicle, house, or charity: No Zakat is due.

• If it is withdrawn and kept idle: Zakat must be paid.

2. Salary-Linked Insurance (S.L.I.), Group Insurance (G.I.S.), and Medical Insurance (Medisep)

These are compulsory for government employees. The permissibility of insurance is a separate discussion, but since it is legally mandated, employees have no choice. The best way to handle it is to treat it as a basic investment—when funds are withdrawn, only take back what was originally invested, avoiding extra benefits. The principal amount should be included in Zakat calculations.

3. Contributory Pension Scheme

This is a highly complicated system introduced in India after April 1, 2013. Unlike statutory pensions, employees must contribute 10% of their salary towards their post-retirement fund, with the government matching this amount. While it is claimed that these funds are invested and multiplied, their status remains uncertain.

However, one’s own 10% contribution must be included in Zakat calculations.

Other Investments:

All employees and non-employees should check for other investments when calculating Zakat. Sometimes, combining various sources unexpectedly reaches the Nisab threshold.

For example, a teacher might assume their Provident Fund (P.F.) will reach Nisab only after eight months. But upon considering a bank deposit, they might realize it reaches Nisab within seven months. Then, they remember money owed to them by a friend abroad, which advances the Nisab date to five months. Next, they recall a loan given to a local Madrasa committee, bringing it even earlier. Lastly, they check their savings for a family wedding and realize that they crossed the Nisab threshold months ago!

Thus, one must carefully track all financial assets—including money owed, fixed deposits, and investment savings—when calculating Zakat.

There are two types of loans (debt obligations) to consider in Zakat calculations:

1. Irrecoverable loans (given as help with no expectation of return). These do not require Zakat.

2. Recoverable loans (given with the intention of getting it back, such as loans for weddings or investments). These must be included in Zakat calculations each year.

Just as we meticulously track our financial accounts, we must carefully and responsibly track our Zakat calculations.