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Zakah/Zakat (The financial obligation upon Muslims)
An important principle of Islam is that everything belongs to God, and that wealth is therefore held by human beings in trust. The word zakah means both “purification” and “growth.” Our possessions are purified by setting aside a proportion for those in need and for the society in general. Like the pruning of plants, this cutting back balances and encourages new growth.
Each Muslim calculates his or her own zakah individually. This involves the annual payment of a fortieth of one’s capital, excluding such items as primary residence, car and professional tools.
An individual may also give as much as he or she pleases as sadaqa-h, and does so preferably in secret. Although this word can be translated as “voluntary charity” it has a wider meaning.
The Prophet said, “Even meeting your brother with a cheerful face is an act of charity.” The Prophet also said: “Charity is a necessity for every Muslim.” He was asked: “What if a person has nothing?” The Prophet replied: “He should work with his own hands for his benefit and then give something out of such earnings in charity.” The Companions of the Prophet asked: “What if he is not able to work?” The Prophet said: “He should help the poor and needy.” The Companions further asked: “What if he cannot do even that?” The Prophet said: “He should urge others to do good.” The Companions said: “What if he lacks that also?” The Prophet said: “He should check himself from doing evil. That is also an act of charity.”