5 Common Mistakes Muslims Make with Zakat

Paying Zakat is a pillar of Islam, but many invalid assumptions can lead to underpaying. Ensure your charity counts by avoiding these errors.

1. Confusing Gregorian and Lunar Years

Zakat becomes due after one "Hawl" (year) passes on your wealth. This Hawl is a Lunar Year (approx. 354 days), not a Solar Gregorian year (365 days).

If you pay consistently on a Gregorian date (e.g., every Jan 1st), you are paying about 11 days late each year. Over 33 years, you would miss an entire year of Zakat! To fix this, simply pay 2.577% instead of 2.5% if you insist on using the Gregorian calendar.

2. Forgetting Personal Loans Given to Others

Many people forget that money they have lent to friends or family is still their wealth. If the loan is "good" (you expect it back), you must pay Zakat on it each year, even if it's not in your pocket.

3. Using the Wrong Nisab Threshold

With gold prices high, many people use the Gold Nisab ($5,000+) to check their liability. However, since the vast majority of our wealth is in cash while the Silver Nisab is much lower (approx $300-$500), anyone with more than the Silver threshold in cash should generally pay Zakat. Using the Gold standard for cash might exempt you incorrectly.

4. Giving Zakat to Wrong Categories

Zakat cannot be given to just any charity. It generally cannot be used to build mosques, wells, or hospitals (unless for the direct benefit of the poor/traveler). It must primarily be given to the eight categories mentioned in the Quran (Surah Tawbah:60), most notably the poor (Fuqara) and needy (Masakin).

Giving Zakat to your parents, children, or spouse is also not allowed, as you are already obligated to support them.

5. Guessing the Value of Gold Jewelry

Don't guess! Weigh your gold. A small difference in grams can change your Zakat liability by hundreds of dollars. Go to a jeweler, get it weighed, and use the current scrap gold price (not the retail price) for calculation.