Zakat on Retirement, Health, and Education Accounts The governing rule for zakat on retirement accounts is this: what you can access without penalty, you pay zakat on, and what you cannot access without penalty, you do not. Access without penalty is the trigger, not the act of withdrawal. Different account types, and even different portions […]
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Zakat on Stocks and Investments: A Complete Guide for Brokerage Accounts If you own stocks in a brokerage account, you pay zakat on them, but the calculation method depends on how you engage with the market. Active traders who frequently buy and sell pay 2.5% on the total market value of their portfolio. Long-term investors
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SAFE Notes, Convertible Notes, and Startup Equity: A Shariah Assessment If you invest in startups, work in one or have founded one, you likely hold equity that exists only on paper: a SAFE note, a convertible note, stock options, or unvested shares. Before asking when zakat is due on any of these instruments, the prior
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Zakat Before Liquidity: SAFE Notes, Options, and Unvested Shares The permissibility of SAFE notes, convertible notes, and equity compensation arrangements is addressed in Part 1 of this series. This article addresses a separate question: when do these instruments become liable for zakat, and on what basis does zakat remain deferred before that point? The Condition:
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Nisab: The Minimum Wealth Threshold for Zakat Nisab (al-nisab) is the minimum amount of wealth a Muslim must possess before being obligated to pay zakat. If your total zakatable wealth equals or exceeds the nisab threshold and you have owned it for one lunar year, you owe 2.5% of that wealth as zakat. If you
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Purification vs. Zakat: What to Do with Interest and Impermissible Income Contemporary zakat practice in Western Muslim communities is marked by a conflation of two independent obligations: the annual payment of zakat on lawful wealth and the purification (tathir) of impermissible earnings. Despite serving different functions, operating under different conditions, and directed toward potentially different
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Your 401(k) and Zakat: Why the Answers Don’t Agree You have a 401(k), you want to pay zakat correctly, and you ask three scholars. One tells you to pay on the full market value. Another says to deduct the penalties and taxes first. A third says you owe nothing until you can actually access the
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Zakat on HSA, FSA, and Employer Benefit Accounts Employer-sponsored benefit accounts have become a standard feature of American compensation, and millions of Muslim workers hold assets in these vehicles. Whether zakat applies to a given account depends on whether the account holder possesses the kind of ownership the classical sources require before the obligation arises.
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The Share, the Shoemaker, and the Structure of Zakat: A Response On why the CRI methodology is not a "70% haircut" but the only coherent application of classical Zakat principles to modern equity holdings. A recent open letter from an anonymous writer, addressed to myself, the Fiqh Council of North America, and the Shariyah Review
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Addendum to the Share & the Shoemaker: The Mudarabah Precedent, Ottoman Codification, and the Consistency of the CRI Framework Since the publication of "The Share, the Shoemaker, and the Structure of Zakat," several responses have pressed the argument that publicly traded shares should be assessed for zakat at their full market value. The objections merit
