If you want to learn how to calculate zakat, you’ve come to the right place. I’ve been paying zakat diligently and imperfectly for years, learning along the way. In this article, I have compiled what I know so everyone else can learn.
Disclaimer: Not a zakat expert. If any info is wrong or can be improved upon, please share in the comments section 🙂
P/s – in case any of you are muallaf and very new to the concept. Zakat in English is similar to the tithe concept. It’s a type of charity in Islam.
This article covers:
- #1 – Types of zakat in Malaysia – did you know there are over 10 types of zakat in Malaysia, if you combine them all!
- #2 – How to pay zakat in Malaysia – which zakat to pay, how to calculate zakat fitrah and zakat emas, who to give zakat to
- #3 – 2 tips to save money and time
Let’s start with,
#1 – Types of Zakat in Malaysia
According to Lembaga Zakat Selangor page, there are 9 types of zakat – Zakat Fitrah for the individual, plus 8 types of Zakat Harta:
- Zakat Pendapatan
- Zakat Wang Simpanan
- Zakat KWSP
- Zakat Takaful
- Zakat Perniagaan
- Zakat Pelaburan
- Zakat Emas & Perak
- Zakat Padi
However, different religious bodies may use different categorisations. For example, Pusat Pungutan Zakat MAIWP listed 11 types of zakat, which overlaps with some of the above and also includes:
- Zakat Saham
- Zakat Pertanian
- Zakat Ternakan
- Zakat Galian
IN ADDITION to that, there is also Zakat on Digital Assets. Learn more about Zakat on bitcoin and other cryptocurrencies, including the fatwa and calculations, in the Cryptocurrencies in Malaysia: Everything a New Investor Should Know article.
I know, that is a LOT. There are SUBtypes too, but let’s not go there (Zakat Pelaburan includes ASB, REITs, Bonds, realised profit, unit trust, etc).
I am aware there is a lot of confusion when it comes to paying zakat in Malaysia, even though people WANT to pay, so let’s cover the basics and head over to the next section.
#2 – How to calculate Zakat in Malaysia
The basics of paying zakat are:
- Find out which zakat(s) is applicable to you
- Calculate how much you owe (if you do)
- Make the payment(s) to zakat beneficieries
That’s the super-simplified version. Beyond that the rules are quite relaxed – there is no LHDN version of zakat authority to double-check your calculations or catch you if you don’t pay.
(Although let me remind you paying zakat is wajib, so do you really want to stay in hell for a few thousand years just to save money.)
Let’s expand on each of them a bit more:
1) Which zakat is applicable to you
Finding out which zakat is applicable to you is easy enough:
- Almost everyone pays Zakat Fitrah or Fidyah Tax
- If you earn an income, you pay Zakat Pendapatan and/or Zakat Perniagaan and/or whichever applies
- If you have savings, you pay Zakat Simpanan and/or Zakat KWSP and/or whichever applies
- To those who have assets and investments, you pay Zakat Emas and/or Zakat Pelaburan and/or Zakat Saham and/or whichever applies
- *Except for Zakat Fitrah, you only pay the rest if you meet the income/wealth threshold (‘cukup nisab’) within a time period (‘cukup haul’) and satisfy all the conditions to paying zakat in Malaysia
2) How to calculate Zakat and which calculations to use
Generally speaking, it is good practice to follow the calculations set by the state you live in.
For example, I live in Selangor, so I:
- Use Lembaga Zakat Selangor’s Zakat Pendapatan Calculator, Zakat Simpanan Calculator, and Zakat Pelaburan Calculator to find out how much I owe,
- Learn additional information, like the Nisab amount for the year (it changes annually)
- Make the payments to zakat beneficieries
Zakat collection in Malaysia, according to state:
*As far as I’m aware, you can pay your zakat online at all of these portals, via bank transfers. You can go and pay in person too of course.
- Selangor – Lembaga Zakat Selangor
- Wilayah Persekutuan – Pusat Pungutan Zakat MAIWP
- Melaka – Zakat Melaka
- Pahang – Pusat Kutipan Zakat Pahang
- Perlis – MAIPs Zakat
- Johor – Majlis Agama Islam Negeri Johor
- Negeri Sembilan – Portal Pembayaran Zakat Negeri Sembilan
- Perak – Majlis Agama Islam Perak
- Kelantan – Majlis Agama Islam Kelantan
- Terengganu – Majlis Agama Islam Terengganu
- Kedah – Lembaga Zakat Kedah
- Pulau Pinang – Zakat Pulau Pinang
- Sabah – Bahagian Zakat dan Fitrah Majlis Agama Islam Sabah
- Sarawak – Tabung Baitulmal Sarawak
Common problem – zakat calculation is confusing/too hard
Admittedly, calculations on specific zakat can get incredibly complex and some people struggle with the zakat calculators. There are also additional things to know, like Zakat KWSP is only applicable when you take the money out, and the method to calculate Zakat ASB.
You have two options:
- You can contact the zakat collection bodies in your state and ask for clarification, or
- Pay extra. Some people simplify it and pay 2.5% on their income, savings and investment and just halal-kan the overpayment
How to Pay Zakat Fitrah or Fidyah Tax
Zakat Fitrah or Fidyah tax is the easiest to pay among all the different types of zakat in Malaysia – there is no calculation, you are given the amount to pay. For example, this was the rate for 2021:
You’ll see a lot of reminders to pay Zakat Fitrah in Ramadhan, the most sunat time to pay.
Last time it was quite common to pay Zakat Fitrah in person, at the booths they set up in public places, but nowadays it’s very easy. You can pay Zakat Fitrah online, through:
- your respective state’s zakat collection portals
- bank transfers, or
- even through e-wallets!
How to Calculate Zakat on Gold (Zakat Emas)
Zakat on gold depends on (1) the gold you wear (ie gold jewellery), and (2) the gold you keep (ie e-gold, gold coins, gold bars etc). The rate is different in both instances and calculated separately, but can be paid together. For example, you have and want to pay zakat on gold in 2021:
- 100 grams of gold jewellery, and
- 50 grams of gold coins
- 50 grams of e-gold in a bank
Therefore, your zakat on gold is:
- RM0 for gold jewellery (the minimum threshold for gold jewellery is 800 grams), and
- RMxxx for gold coins plus e-gold (both totaled 100 grams, which is over the minimum threshold of 85 grams)
IMPORTANT: You need to actually WEAR the gold jewellery. If you don’t wear it at least once a year, then it’s included and calculated under the ‘gold you keep’ quota.
You can refer to this manual to learn how to calculate zakat on gold.
3) Who are the zakat beneficiaries
People/bodies who are eligible to receive zakat are:
- (1) the poor,
- (2) the needy,
- (3) new converts,
- (4) the debt-ridden,
- (5) those in bondage (it used to refer to slaves, but now interpreted figuratively),
- (6) Islamic causes (build mosques, etc),
- (7) the wayfarers (people traveling and without resources, like refugees fleeing a country), and
- (8) zakat administrators (people who distribute)
From what I’ve learned, it is okay to just give it directly to people in one of those eight categories. It is permissible. However it is better to sedekah what you can instead and channel your zakat to (8) zakat administrators.
That brings us to the next section-
#3 – 2 tips to save money and time when paying zakat in Malaysia
If you have to pay zakat anyway, why not optimise it right?
Tip #1: Claim zakat as tax rebate in Malaysia
For practical reasons, I pay my zakat to zakat administrators because they can do the distribution on my behalf… and also because I can claim the zakat payment as tax rebate.
If this is new info for you, I just want to confirm that yes, you can. So let’s say your payable Zakat amount was RM800, and your income tax was RM1000. After deducting zakat payment, you only pay the remaining RM200.
The most efficient way to do this is:
- Pay zakat in December, after you add up your income for the whole year (also works if you pay zakat on monthly basis, via automated salary deduction or manually)
- Get and keep the receipt
- Deduct the amount from your payable tax amount when you file for income tax in the following year
- Example: the receipt for zakat paid in 2020 can be claimed as tax rebate during income tax submission in 2021
Make sure to get a receipt
Take note though, not all zakat beneficiaries can provide a receipt for zakat payment, so you need to check. As a general rule, zakat administrators at state level will issue a receipt upon zakat payment.
Other options that give receipt upon zakat payment includes:
- UNHCR Zakat Fund (reader-suggested; I’ve never tried myself), and
- Global Sadaqah (pick the one tagged Zakat Eligible; I’ve done this option)
Tip #2: Choose investments that pay zakat on your behalf
Tip #2 is for those of you who want to pay Zakat Pelaburan perfectly but find the calculation confusing. If you keep your investments here, you don’t even have to know how to calculate zakat, they will do it for you.
The investment platforms are:
- Tabung Haji,
- AHB (Amanah Hartanah Bumiputera)
- Wahed Invest (I covered this in a section in my Wahed Invest Review article; use ‘surbin1’ to get RM10 when you open an account)
The first two options automatically pay zakat on your behalf. Wahed Invest on the other hand will send you an email telling you the amount you owe, so all you have to do is pay. Easy.
Do you pay zakat? What other tips and advice can you add?
As a Muslim, I’m generally OK with paying zakat in Malaysia. I was told early on that as much as I try to generate halal income, some of my money will not be halal due to imperfections in the system. Therefore I accept it as a responsibility, plus I believe it’s a way for me to ‘cleanse’ my earnings.
However, my methods and knowledge here are in no way perfect, so I’d like to ask the more enlightened among you for additional tips and advice that can make zakat payment easier and more convenient.
Thanks in advance 🙂