How to Calculate Zakat in Malaysia: Zakat Fitrah, Zakat Pendapatan and more
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
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 withdraw the money, and the method to calculate Zakat ASB.
You have three 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
- Prioritise the investments that help you calculate and/or pay zakat. See the last section in this article
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.
In Malaysia, zakat administrators are, but are not limited to state collection bodies. They are:
Zakat collection bodies in Malaysia, according to state:
- 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
*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.
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 (important)
- 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.
Investment platforms that pay zakat on your behalf:
- Tabung Haji,
- AHB (Amanah Hartanah Bumiputera)
You don’t have to worry about paying zakat for both these investments because they will automatically calculate and pay on your behalf.
Investment platforms that help you calculate zakat:
- Wahed Invest. They will send you an email telling you the amount you owe, so all you have to do is pay. I covered this in a section in my Wahed Invest Review article (use ‘surbin1’ to get RM10 when you open an account).
- ASNB funds, including ASB. Download MyASNB app’s new zakat calculator feature to automatically calculate how much Zakat ASB you owe
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 🙂
Q: What in the name of God is Zakat Ma’adin, Kunuz and Rikaz???
A: Zakat Ma`adin: Zakat on the produce of gold/silver mine
Zakat Kunuz: Zakat payable upon finding a treasure
Zakat Rikaz: Zakat on other elements/minerals found under earth save for gold/silver, e.g. coal, crude/fossil oil, tin etc.
Q: That leaves only one type of zakat left: Zakat Pendapatan. Tithe on my income. I believe this is the only zakat I have to pay now, but the more enlightened among you can advice.
A: This is gonna be awkward, but I’m subscribing to the old school of thought on Zakat. Basically Zakat only becomes compulsory/Wajib due to 2 elements:
1. Nisab – A minimum amount for one to be eligible to pay Zakat. The 2015 Zakat nisab was set at RM11k (sorry for any mis-quotation, but it was in the region of 10k – 12k)
2. Hawlani Hawl – the passing of the 12 lunar/Islamic months
My take on Zakat is one needs to have untouched savings equivalent to the Zakat nisab for 12 lunar months for Zakat to be compulsory. As we already know that Islam is fair & just & by simply earning more that the Zakat nisab doesn’t make Zakat compulsory. Give the scenario of a person who earns RM15k a month but has 10 dependents. If one carefully study the elements of Zakat (nisab & hawlani hawl) one will notice that Zakat is only payable by those with extra savings & if one doesn’t meet the Zakat criteria, no Zakat is compulsory.
Wallah `Alam (Allah knows best)
Thanks for the explanation on Zakat Ma’adin, Kunuz and Rikaz. The treasure one is interesting. Modern day interpretation?
Allah knows best, indeed 🙂
The examples of modern day treasure maybe revolves around the Mystery of Oak Island, Yamashita’s Treasure, Hunting Hitler etc. Wallah `Alam.
I usually paid my Zakat Pendapatan to Lembaga Zakat Negeri Kedah because that’s where my hometown is. They update their Facebook page regularly and you can see clearly their zakat distribution to the needy which is a good thing because you know your money is going to the right place.
Apart from that, you can go to LHDN website and search for Institution/Organization that is already approved by them under Section 44 (6) of Income Tax Act 1967 where all your contributions are tax deductible. There’s Yayasan for student, for the disabled and a lot more. If you got CIMBClicks, these organizations are listed in Pay Bills tab which you can choose to pay directly to organization of your choice (after you have researched the organization of course). But please note, these payments will be categorized as tax deductible and not tax rebate like Zakat contributions.
Hope that helps. Cheers.
This is amazingly informative, thank you!
I’m still confused about tax rebate vs tax deductible vs tax exemption to be honest. Should find out the difference soon, tax season is here!
I’m still confused about zakat. I thought there is no compulsion in Islam.
As a closet agnostic (ex-muslim) and working in KL, I don’t wanna pay zakat. I’m not eligible yet to pay income tax, but I’m not sure about zakat. I know the company’s HR would do everything for the employees when it comes to tax thingy, but I still don’t wanna pay zakat as I consider myself a non muslim. Is it optional or must all muslims pay zakat once they are income tax eligible? Can we not have the option not to pay zakat at all?
I can’t ask my HR because they’re all typical muslims (I need to be very cautious).
I just need help about this zakat thingy. That’s all.
Zakat is optional. There’s no police to catch you if you don’t pay, unlike income tax. If you don’t wanna, you don’t hafta.
What a relief to know that someone else shares my frustrations! I have my doubts on the Islamic authorities in our country. Agree with you – when in doubt, seek knowledge.
In addition to Islamic Relief, Muslim Aid receives zakat payments too. Here’s the link: http://muslimaid.org.my/product/zakat/
You can also pay zakat through UNHCR, which is the UN agency for refugees. They’re currently only distributing zakat to Syrian refugees in Jordan though, and the minimum contribution is USD525. Link: https://giving.unhcr.org/en/zakat/
On a second note, for the same amount of zakat vs tax exempt donations, you would pay less personal tax with deductions on zakat. Can test that in your online tax computation come tax season. (:
I learned a whole lot from this tweet thread. https://twitter.com/acaiijawe/status/946190484187234304
Thanks for the tips, QQ! Great to know about Muslim Aid and UNHCR! Will add to the post crediting you!
Thanks also for the twitter link, that’s thoughtful of you 🙂
Have a wonderful year <3
Really glad that there are people out there who also share my qualms regarding the Islamic authorities in Malaysia. I have only recently found your website, and I’d like to thank you for the easy to understand explanations. Haha.
I have a few questions about your experience in paying zakat. Regarding the tax refund arising from higher zakat payment as opposed to income tax, are you certain that you will get the refund? The Income tax Act 1967 as at 1 October 2017, Section 6A(4A) states that:
Where the total amount of the rebate under subsections (2) and (3)
exceeds the income tax charged (before any such rebate) for any year of
assessment, the excess shall not be paid to the individual or available as a
credit to set off his tax liability for that year of assessment or any subsequent
I’m still not eligible to pay zakat pendapatan yet, but will be next Islamic year. And me being the greedy bugger I am, want to get my money’s worth, while still fulfilling my duties as a muslim as well as a Malaysian taxpayer. I’m currently trying to plan my upcoming financial commitments and identify the benefits and exemptions I can be entitled to and utilize them accordingly. I’m uncertain if that specific subsection had recently been introduced, but I would really appreciate your input on this.
You’re welcome, glad to have you here 🙂
On your Qs, that’s a tricky one. I’ve always gotten some tax refund back. The process is automatic after I file taxes and declared all income and tax relief (including zakat). Unless I did my taxes wrong (I hope not), it should be the same for you.
That said, I have no way to confirm whether what I did was 100% correct. Will be extra careful and take notes for this year’s tax filing. If I come across anything useful, I’ll edit this page so its as comprehensive as possible.
Do you know if we can still pay zakat to IRM and get MAIP’s receipt?
I noticed when I paid in March 2018, they were silent about MAIP. The receipt and letter issued from IRM still say tax exempted though.
Copy+pasted from the letter;
**ISLAMIC RELIEF MALAYSIA telah mendapat kelulusan bagi status pengecualian cukai pendapatan di bawah subseksyen 44 (6B) Akta Cukai Pendapatan 1967 [No Ruj.: (8.09)248/40/71338(vol. 16)(SK.14)(13)]
Thanks Suraya, I managed to contact IRM directly via their Whatsapp. Sebarang sumbangan kepada islamic relief layak mendapat tax-exempted resit kecuali zakat, fidyah dan qurban. For zakat tax rebate, can still pay to IRM and request it to be for Zakat MAIP.
Anyway, thanks for this article. I am so gonna move away from paying to LZS. Wish I found your article earlier, but I guess better late than never!
That’s good to know, thanks for reporting back AA. Yes, definitely, better late than never!
Hey Suraya and friends,
Just want to share. If you donate to Aman Palestin, you can get tax deduction too. You need to go their website, fill in online form and complete the donation using FPX. Make sure to print/save the receipt.
More info about it can be found here: http://bit.ly/AmanPalestinLHDN
I hope this helps.
Thank you for the info! Nice to know we have another option, and for such a great cause too!
Tax treatment between IRM and zakat authorities is different.
IRM would only allow you to get deduction under allowable expenses.
Zakat reciept issued by zakat authorities would allow you to get tax deduction directly.
To make it simple,
Receipt issued by IRM (and other same NGO) is on the same level with receipt of buying books, subscribing internet where you are allowed to deduct you income prior tax calculation.
Receipt issued by Zakat Authorities (issued by all states religious council only) is the same level as paying tax itself. That why you can set-off the zakat payment againts the tax payment itself.
Phew, good to know I’ve been doing my taxes right all this while. Thanks for the clarification Adi!
p/s- nice website you have there!
FYI. If the zakat payment you made is higher than your income tax for the year, u get nothing back. E.g. u paid rm1000 to zakat. U suppose to pay rm800 to lhdn. If u already paid rm800 to lhdn, then lhdn will return rm800. That’s how it works I think.
Hi Michael T,
That makes sense, but why do I recall getting refunds from LHDN? I’ll pay attention during next year’s zakat/tax time and will report back here
Thank you for this wonderful post. I have a question I was wondering if you could enlighten me.
Is it possible for me to choose the amount of Zakat i wish to pay. For example, I would like to pay more than the 2.5% calculation in order to pay RM0 of income tax. Or is it a fixed amount? No more, no less, but exactly 2.5%
Sometimes with the tax rebates and reliefs and everything, the 2.5% in zakat might even exceed one’s income tax, so I don’t see why not – but definitely check with LHDN for a conclusive answer.
Thank you for your detailed, informative and helpful post outlined here. I too, have little to none knowledge of this. Really appreciate this Suraya !
I’m lazy to calculate so much, so every time I get my salary/income/any money coming in, I just calculate 2.5% of the total and transfer it to Lembaga Zakat Selangor (LZS) via Maybank2u. (The good thing is that zakat is tax deductable). I like LZS because their website is very good, and I can print my transaction slips according to year if I ever get audited by LHDN. So I don’t have to susah2 keep receipts.
Thanks Dina for leaving your comment here! Useful info 🙂