HOW TO CALCULATE ZAKAT IN SAUDI ARABIA?

A. Net profit as adjusted for zakat purposes =

Net profit (loss) per books plus adjustments [sum of1-5; where

1. Reserves formed during the year of audit
2. Social insurance paid abroad
3. Fixed assets depreciation difference
4. Expenses not related to the activity
5. Zakat or tax paid and charged to accounts]

B. Paid-up capital plus additions to paid-up capital [sum of1-5; where

1. Balances of all provisions and reserves that completed one year, with exception to depreciation provision
2. Prior year’s profits carried forward (if any)
3. Loans used to acquire or finance fixed assets or investments
4. The owner’s/ partner’s credit current account
5. Retained profits for distribution (if any)]

C. Deductions [sum of1-7;]

1. Fixed assets net value
2. Carried over loss as adjusted by DZIT
3. The year’s loss as adjusted
4. Pre-setting up expenses balance
5. Entity’s construction in progress
6. Investments in other entities that were subject to zakat at these entities
7. Investments in the Kingdom’s government bills (average of12 months)

   Zakat payable =2.5% of zakat base

   Zakat base = A + B – C

    

Agree with the dignified colleagues

whether it is Saudi Arabia or any other nations,formula for calculation of Zakat is equally applicable to all. Kindly contact respective Ulema.

Zakat   should be calculated according to the following steps:     

1. Defining  the  date  completion  the      Lunar year. This date varies              according to  the  circumstances        of   the  Zakat  giver ( Payer).  With the exception of Zakat on agriculture, fruits, minerals and     minerals in the earth. In these cases Zakat should given at time of harvest or the acquisition of the minerals.  In the case of defending the Lunar year for the first time, the date of beginning and the date of completing should be defined according to the date of reaching the Nisab amount

2. Different Monies owned by the Zakat     Payer  should   be   assessed   at  the   end  of   year   according  to        the rules    of Zakat. From this money it    should  be           defined   on  which Zakat   must       be given.  They are  called                Zakatable Money

3. Assessment of Taxable  Liabilities (deductions)   which are due to be deducted from Zakatable money according to   the    rules  of  Zakat.                                 

4. Defining the receptacle of Zakat       ( Zakat Base ) by the  deduction  of   Due   Liabilities  from Zakatable Money by the following equation.                                                         

The receptacle  of  Zakat ( Zakat Base ) =

 Zakatable  Money – Due Liabilities.                                                 

5-  Calculating the Nisab  as mentioned

      before. Each kind of Zakat has a          special  Nisab

6. A comparison should made between    the Zakat Base, defined in     step4 above, with Nisab defined   in step5. So as to know whether   Zakat is due or not. If the  Zakat Base has reached the amount of  Nisab, then Zakat would be Due.                        

7. Define the amount which should be     taken from the receptacle of Zakat    ( Zakat Base ), it is as  a                      Percentage    % , it is culled  the       Price of Zakat ,

    It  varies from2,5% to20% of

    Zakat Base

8. Calculating the amount of Zakat by       multiplying the amount of the           receptacle by the amount of the        price (or percentage) of Zakat. The     result should be the amount of due Zakat.   

  9. Define who pays the due Zakat afollow:

a. For individuals and personal establishments:                                    

The individuals or the owner should pay the due Zakat.                                             

     The amount of the due Zakat should    be divided between the partners,       each according to the percentage      ofhis share in the capital of partnership.                                 

  c. For investment companies:        

    The amount of the due Zakat should     be divided on the number of             shares to know the amount of           Zakat due on each share. Each          investor should then pay Zakat          according to his ownership of shares.   

  d. For partnerships of labor and       capital (mudarabah Sahr’iyyah) :  The laborer (Mudarib) pay Zakat        according to his share of profits.        Whereas the financier (Mumawwil)    should pay Zakat on the capital and   the profit less the laborer’s share.    

  10. Zakat Amount  should  be       distributed according to its duers        in   the   light  of   the    rules  of  Islamic  Law (Shari’ah).                                                            

   It is permissible to give Zakat to institutes or committees of Zakat to redirect the funds in their due activities and persons according to Islamic Law (Shari’ah).