How to Calculate Zakat on Salary in Bangladesh
Zakat

How to Calculate Zakat on Salary in Bangladesh? Lets Know Now

In Bangladesh, the concept of zakat is an integral part of the Muslim community’s life. It is a religious obligation for Muslims to give a portion of their wealth to those in need. Zakat is one of the Five Pillars of Islam, making it a crucial aspect of a Muslim’s faith and practice.

However, many people find it challenging to calculate zakat, especially on their salary. This blog aims to simplify the process of calculating zakat on salary in simple English, making it easier for everyone to understand and fulfill this important religious duty.

What is Zakat?

Zakat is a form of almsgiving treated in Islam as a religious obligation or tax. It is not just charity; it is a mandatory process for those who are financially able.

The word “zakat” means “purification” and “growth.” By giving zakat, you are purifying your wealth, and it also helps you grow spiritually and financially.

The Quran emphasizes the importance of zakat and its role in society, helping to reduce poverty and inequality.

Who Must Pay Zakat?

Every Muslim who meets the nisab (minimum amount of wealth that makes one liable to pay zakat) must pay zakat. This applies to adults and children, men and women, as long as their wealth meets or exceeds the nisab threshold.

Calculating zakat

The nisab value is equivalent to 85 grams of gold or 595 grams of silver. The value of nisab can fluctuate based on the market price of gold and silver, so it’s essential to stay updated with current values.

Understanding Salary and Zakat

Salary is a common source of income for many people in Bangladesh. Calculating zakat on salary can be straightforward if you follow the correct steps. Here’s a step-by-step guide to help you understand how to calculate zakat on your salary.

Determine Your Annual Savings

To calculate zakat on your salary, you need to determine your annual savings. This is the amount of money you have saved from your salary over the year, excluding your necessary living expenses. Necessary living expenses include rent, food, utilities, transportation, and other essential costs. Here’s a simple formula to help you calculate your annual savings:

  • Annual Savings = Annual Salary – Necessary Living Expenses
  • For example, if your annual salary is 600,000 BDT and your necessary living expenses are 400,000 BDT, your annual savings would be:
  • 600,000 BDT – 400,000 BDT = 200,000 BDT

Check if Your Savings Meet the Nisab Threshold

Once you have calculated your annual savings, you need to check if your savings meet the nisab threshold. As mentioned earlier, the nisab value is equivalent to 85 grams of gold or 595 grams of silver.

You can find the current market price of gold or silver and multiply it by the nisab weight to determine the nisab threshold in Bangladeshi Taka (BDT).

For instance, if the current price of gold is 5,000 BDT per gram, the nisab threshold would be:

85 grams x 5,000 BDT/gram = 425,000 BDT

If your annual savings (200,000 BDT in our example) are below this threshold, you are not required to pay zakat on your salary. However, if your savings meet or exceed this threshold, you must pay zakat.

Calculate Zakat on Your Savings

Zakat is calculated at the rate of 2.5% of your savings. To calculate zakat on your savings, simply multiply your annual savings by 0.025. Using our previous example:

Zakat = Annual Savings x 2.5% Zakat = 200,000 BDT x 0.025 = 5,000 BDT

So, you would need to pay 5,000 BDT as zakat on your salary savings.

Consider Additional Sources of Income

In addition to your salary, you may have other sources of income, such as bonuses, investments, or side businesses. It’s important to include these additional sources of income when calculating your zakat.

Add your additional income to your annual savings and then calculate zakat on the total amount.

paying zakat

For example, if you have an additional income of 100,000 BDT from investments, your total savings would be:

Annual Savings = Salary Savings + Additional Income Annual Savings = 200,000 BDT + 100,000 BDT = 300,000 BDT

Now, calculate zakat on the total savings:

Zakat = 300,000 BDT x 0.025 = 7,500 BDT

Deduct Debts and Liabilities

If you have any debts or liabilities that need to be paid within the zakat year, you can deduct these amounts from your total savings before calculating zakat.

This includes personal loans, credit card debts, and other financial obligations. Subtract the total debts from your annual savings to get the net savings, and then calculate zakat on this amount.

For example, if you have a debt of 50,000 BDT, your net savings would be:

Net Savings = Total Savings – Debts Net Savings = 300,000 BDT – 50,000 BDT = 250,000 BDT

Now, calculate zakat on the net savings:

Zakat = 250,000 BDT x 0.025 = 6,250 BDT

Timing of Zakat Payment

Zakat is typically calculated once a lunar year (Hijri year). You should mark a date in the Islamic calendar to assess your wealth and calculate zakat each year. This date is known as the zakat due date.

Many people choose to pay their zakat during the month of Ramadan, as the rewards for good deeds are believed to be multiplied during this holy month. However, you can choose any date that is convenient for you.

Practical Example

Let’s go through a practical example to consolidate our understanding. Suppose You is a salaried employee in Dhaka. His annual salary is 720,000 BDT, and his necessary living expenses amount to 480,000 BDT.

He also has an additional income of 120,000 BDT from a side business. You has a debt of 60,000 BDT that he needs to pay off within the zakat year. The current price of gold is 5,000 BDT per gram.

  • Calculate You’s annual savings: Annual Savings = Annual Salary – Necessary Living Expenses Annual Savings = 720,000 BDT – 480,000 BDT = 240,000 BDT
  • Add additional income to the savings: Total Savings = Annual Savings + Additional Income Total Savings = 240,000 BDT + 120,000 BDT = 360,000 BDT
  • Deduct the debt: Net Savings = Total Savings – Debts Net Savings = 360,000 BDT – 60,000 BDT = 300,000 BDT
  • Check if the net savings meet the nisab threshold: Nisab = 85 grams x 5,000 BDT/gram = 425,000 BDT
    Since You’s net savings (300,000 BDT) are below the nisab threshold (425,000 BDT), he is not required to pay zakat on his salary savings.
How to Calculate Zakat on Salary In Bangladesh Lets Know Now

FAQ

What if my savings fluctuate throughout the year?

It’s common for savings to fluctuate due to various expenses and income variations. You should calculate zakat based on your savings on the zakat due date. If you have multiple sources of income or your savings change significantly, it’s advisable to keep a record of your financial transactions and calculate your average savings over the year.

Do I need to pay zakat on my salary if I receive it monthly?

Yes, you should save a portion of your salary each month and calculate zakat on your annual savings at the end of the lunar year. If your savings meet the nisab threshold, you are required to pay zakat.

How do I calculate zakat if I receive a bonus or a sudden increase in income?

Any additional income, such as bonuses or unexpected gains, should be added to your total savings. Calculate zakat on the combined amount at the end of the lunar year.

Can I pay zakat in instalments?

Yes, you can pay zakat in installments if it is more convenient for you. However, it’s essential to ensure that the full amount of zakat is paid within the zakat year.

What if I forget to pay zakat on time?

If you forget to pay zakat on time, you should pay it as soon as you remember. It’s important to keep a reminder for your zakat due date to avoid missing the payment.

Conclusion

Calculating zakat on salary might seem complicated at first, but by following these simple steps, you can easily fulfill this important religious obligation. Remember, zakat is not just a financial duty; it is a way to purify your wealth, help those in need, and grow spiritually.

By paying zakat, you contribute to reducing poverty and inequality in society, making the world a better place for everyone. If you have any doubts or need further assistance, don’t hesitate to consult a knowledgeable person or a religious authority. May Allah accept your zakat and bless you with more prosperity and happiness.

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