Agency and Zakah

A Guide to Zakah - Understanding & Calculation, Fiqh / Tuesday, August 23rd, 2011

One is not obliged to distribute the Zakah by himself to the entitled recipients. He may validly appoint an agent (whether natural person or organization) to pay the Zakah on his behalf.

In appointing such an agent, the Zakah payer must bear in mind that the Zakah obligation is not discharged if the agent fails to distribute the Zakah to the entitled recipients. At the same time, possession of the Zakah amount by the agent will be deemed to be possessed by the principal (Zakah payer) as in the case of those organizations, who are guilty of serious maladministration by collecting Zakah and not distributing the same for a number of years without valid reason.

It follows that the Zakah payer must exercise utmost care in appointing an agent who must be both trustworthy and also conversant with the laws of Zakah.

The agent, unless instructed to the contrary, may validly give Zakah to his wife and children if the latter do not own nisaab. On the other hand, the agent himself cannot take Zakah unless he has the express authority to do so. For example, he may take Zakah if the Zakah payer gives him a mandate in the following terms: “Pay Zakah to whomsoever you wish”.

Zakah on the employees’ provident fund

If the salary of the employee is deducted at source, without giving this amount to the employee, Zakah is not payable on the amount kept in the Employees’ Provident Fund, until the employee receives the same. When an employee receives it on his retirement, the amount so received shall form part of his zakatable assets of that year only, and such part of it, that is not spent before the valuation date, shall be subject to Zakah, and Zakah will be payable on the aggregate balance of his assets (including the balance of the amount received from the Fund) on the valuation date.

If, on the other hand, the employee first receives this amount and then with his own intention, puts this money in the provident fund, then this money will become the subject matter of Zakah. And Zakah will be obligatory for all the years in which the money is kept in the fund.

In other words, the amount received from the Provident Fund must be held for one year before Zakah is payable thereon. If the recipient has existing zakatable assets equal to nisaab, then the amount received from the Provident Fund will be added thereon and the whole amount, or the balance remaining (in case of expenditure) will be subject to Zakah of the next valuation date. For example, the Zakah payer’s valuation date is 1st day of Ramadaan each year, and he receives the lump sum from the Provident Fund two months before that date. The lump sum will be added to his existing nisaab, and he will pay Zakah thereon on his valuation date next, namely, 1st day of Ramadaan.

Zakah to the charitable hospitals

If Zakah is paid to a charitable hospital, certain arrangements must be followed otherwise Zakah will be void.

Every Zakah deserving patient should appoint the management of the hospital as his agent to receive Zakah and spend it on procurement of the medication and paying cash against other expenses incurred against his treatment. This can be done through filling a form before the treatment of the patient.

If a charitable hospital follows this arrangement, Zakah can be given to it. Otherwise, in the case where no agency agreement is made, Zakah will be void.

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