Question:
Assalamualaikum wrm.wbt.,
I want to ask whether the percentage of 2.5% for zakat is applicable for my EPF savings?
Answer:
Waalaikumussalam wrm. wbt.
Alhamdulillah, praise and thanks to Allah for the countless blessings He has blessed us all with. Blessings and salutations to the Prophet Muhammad PBUH, his wives, his family, companions and all those that follow his teachings to the day of judgement.
We will start with the definition of zakat.
The word zakat (الزكاة) is taken from (زكا الشيء), which means something that increases and growth. Likewise, (زكا الزرع وزكت التجارة) means plants and business that is growing or increasing.
Zakat also means purification. This is in accordance with the statement of Allah SWT:
قَدْ أَفْلَحَ مَن زَكَّاهَا
“He has succeeded who purifies it,”
Surah al-Syams (9)
According to the above verse, a successful person is someone who purifies himself from any bad character.
The meaning of the term according to syarak is a certain amount taken from a part of property which is wajib to be given to certain groups of people when it fulfils the set conditions. The property given to certain groups of people is named as zakat. The reason is through the distribution of zakat property and with the du’a of the recipients, the rest of one’s property will increase and be blessed.
Giving zakat also means purifying one’s property from anything that is doubtful (syubhah). In other words, it separates the rights of others which was from the property, especially the rights of those in need. (See al-Fiqh al-Manhaji, 1/629-630)
Zakat on savings is zakat paid by a person from his savings that has fulfilled the haul (a year) and nisab whether it is in regular saving account, fixed deposit account, current savings account, trust fund, EPF and other accounts categorized as savings.
The Prophet PBUH said:
لَيْسَ فِيمَا دُونَ خَمْسِ أَوَاقٍ مِنَ الْوَرِقِ صَدَقَةٌ
“Zakat for silver is not wajib if the total is less than 5 Uqiyah (40 dirhams).”
Sahih al-Bukhari (1413) and Sahih Muslim (980)
The author of a-Fiqh al-Manhaji said: Zakat on gold is not applicable until the total of it is 20 mithqal, while for silver is 200 dirhams. This is according to a hadith from Ali bin Abu talib RA, the Prophet PBUH said:
إِذَا كَانَتْ لَكَ مِائَتَا دِرْهَمٍ، وَحَالَ عَلَيْهَا الْحَوْلُ، فَفِيهَا خَمْسَةُ دَرَاهِمَ، وَلَيْسَ عَلَيْكَ شَيْءٌ يَعْنِي فِي الذَّهَبِ حَتَّى يَكُونَ لَكَ عِشْرُونَ دِينَارًا فَإِذَا كَانَ لَكَ عِشْرُونَ دِينَارًا، وَحَالَ عَلَيْهَا الْحَوْلُ، فَفِيهَا نِصْفُ دِينَارٍ، فَمَا زَادَ فَبِحِسَابِ ذَلِكَ
"When you possess two hundred dirhams and one year passes on them, five dirhams are payable. Nothing is incumbent on you, that is, on gold, till it reaches twenty dinars. When you possess twenty dinars and one year passes on them, half a dinar is payable. Whatever exceeds, that will be reckoned properly."
Sunan Abu Daud (1573)
According to the rate of zakat for silver and gold, if it is calculated, it is 2.5%.
To conclude, zakat on savings is 2.5% just like the zakat for silver and gold and it is taken from the lowest remaining savings of a person that has fulfilled its conditions. While for the payment of zakat for EPF, we agree with the decision made by the 5th and 74th National Muzakarah Fatwa Committee for Religious Matters Malaysia which state the following ruling:
- It is wajib for Muslim workers to give zakat for his EPF savings upon reaching the haul which is a year after accepting it.
- EPF contributor is encouraged to pay zakat promptly after receiving the EPF money when it fulfils the nisab without waiting the haul of a year.
Please refer to the nearest zakat centre which is the body of authority in this matter.
Hopefully, we are from among those who fulfils their zakat obligation.