Paying zakat is one of the five pillars of Islam, and thus, the responsibility and obligation of every observing Muslim.
However, zakat can also be a complicated topic, as there are many types of zakat, with different zakat calculations, and many zakat collection bodies.
In this article, we hope to shed some light and clarify some must-know information so that you can optimise your zakat payments better.
Types of Zakat in Malaysia
According to Lembaga Zakat Selangor, there are nine types of zakat – Zakat Fitrah for all individuals, plus eight types of Zakat Harta:
- Zakat Pendapatan
- Zakat Wang Simpanan
- Zakat KWSP
- Zakat Takaful
- Zakat Perniagaan
- Zakat Pelaburan (including Zakat ASB)
- 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 overlap with some of the above and also include:
- Zakat Saham
- Zakat Pertanian
- Zakat Ternakan
- Zakat Galian
In addition to that, there is also a fatwa that provides guidelines on paying Zakat on Digital Assets.
Therefore, how do you know which one(s) to pay?
Which Zakat to Pay?
The basics of paying zakat are:
1. Find out which zakat(s) is applicable to you.
2. Calculate how much you owe (if you do-if you don't fulfil the requirements, you do not owe anything).
3. Make the payment(s) to zakat beneficiaries every year.
That's it. 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. You don't go to jail if you don't make payments.
Let's expand on each of them:
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 (see below).
- 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.
Among all zakat, Zakat Fitrah or Fidyah tax is arguably the most important to pay. It is also the easiest to pay among all the different types of zakat in Malaysia-there is no calculation, just an amount to pay, which may change yearly. Meant for the needy in the celebration of Hari Raya Aidilfitri, most people pay Zakat Fitrah in Ramadan.
It is very easy to pay Zakat Fitrah nowadays. You can pay Zakat Fitrah in person, at booths set up at public places or online, through:
- your respective state's zakat collection portals,
- bank transfers, or
- even e-wallets!
2) Which zakat calculations to use?
Generally speaking, it is good practice to follow the calculations set by the state you live in.
For example, if you live in Selangor, then:
1. Use Lembaga Zakat Selangor's Zakat Pendapatan Calculator, Zakat Simpanan Calculator, and Zakat Pelaburan Calculator to find out how much you owe,
2. Learn additional information, like the nisab amount for the year (it changes annually).
3. Make the payments to Lembaga Zakat Selangor, or other zakat collection bodies.
Other zakat collection bodies include platforms like GlobalSadaqah.com or state zakat collection bodies. You can find resources and even zakat calculators in most of these pages:
- Selangor – Lembaga Zakat Selangor
- Wilayah Persekutuan – Pusat Pungutan Zakat-MAIWP
- Melaka – Zakat Melaka
- Pahang – Pusat Kutipan Zakat Pahang
- Perlis – MAIPs
- Johor – Majlis Agama Islam Negeri Johor
- Negeri Sembilan – Portal Pembayaran Zakat MAINS
- Perak – Majlis Agama Islam dan Adat Melayu Perak
- Kelantan – Majlis Agama Islam Dan Adat Istiadat Melayu Kelantan
- Terengganu – Majlis Agama Islam Dan Adat Melayu Terengganu
- Kedah – Lembaga Zakat Negeri Kedah Darul Aman
- Pulau Pinang – Zakat Pulau Pinang
- Sabah – Bahagian Zakat dan Fitrah Majlis Agama Islam Sabah
- Sarawak – Tabung Baitulmal Sarawak
If you have questions about paying zakat, it is best to ask the zakat collection bodies in your state. They can help you with the calculations, or even advise you on setting up the Monthly Zakat Deduction Scheme or Skim Potongan Zakat Bulanan, where your zakat will be auto-deducted on a monthly basis.
You may also opt to choose certain investments that make zakat calculation and payment easier. For example, Tabung Haji and AHB (Amanah Hartanah Bumiputera) both automatically calculate and purify your money (through zakat) on your behalf. ASNB's MyASNB app also has a zakat calculator feature that can calculate the amount of zakat you owe and direct you to the payment page.
If you're not able to get in touch with zakat collection bodies, or if you still find zakat calculations confusing, you may also use the 2.5% rule - just pay 2.5% on assets that satisfy nisab and haul.
Lastly,
Don't forget to claim zakat as tax rebate in Malaysia
While it is permissible to pay your zakat to eligible zakat beneficiaries (there are eight categories), it is advisable to pay to zakat collection bodies that can provide you with an official receipt.
It is important to insist on that receipt, because you can deduct the zakat amount against your income tax. It is allowed as tax rebate.
For example, let's say your payable zakat amount was RM800, and your income tax was RM1,000. 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. E.g. the receipt for zakat paid in 2020 can be claimed as tax rebate during income tax submission in 2021.
This covers the must-know information about calculating and paying zakat in Malaysia. All the best in earning money, so you will be able to pay more zakat and contribute to the betterment of the ummah!
This article is contributed by Suraya Zainudin-writer, speaker and digital marketer for one of Malaysia's top personal finance websites.
The opinions expressed in this article are those of the author and do not necessarily reflect the views of the Credit Counselling and Debt Management Agency (AKPK).
