Sh. Bilal Ismail: Zakat on Businesses

In this video, Sh. Bilal Ismail teaches us Fiqh (understanding) of Zakat on businesses through the analysis of a case study.

Case Study

Ahmed owns a bookstore. He has $10,000 in his bank account and $100,000 worth of stocks (cost price).There are three options:

1. Cost price: $100,000 Would it be allowed for him to work out the value based on cost price? No, because it may have increased or decreased, so this would not be allowed.
2. Wholesale price: $150,000 This would be a just, affordable, and rounded figure. This would be fair for Zakat.
3. Retail price: $200,000 This would be higher and more expensive. This would be Ihsan (excellence) in Zakat.

How much Zakat does he pay?

• 2.5% of the $10,000 in the bank AND
• 2.5% on either the wholesale price, or if he wishes to pay his Zakat in an excellent manner, then the retail price.

In this scenario, Ahmed’s Zakat would come out to be $4000 or $5250, depending on the selected price.For assistance in calculating your Zakat, please use our free services: Our Zakat calculator, our free Turbo Zakat app, or give us a call today at +1 888 693 2203.Written by: Areej H.