How to Calculate Zakat on Bonus

Zakat is the spiritual act to bring social justice in the community. In this kind of systematic giving the rich share the benefit of their prosperity with those who are less fortunate. This is the Islamic approach to remove greed and envy from our society, establish peace and purify one’s soul and wealth.

Allah says in the Holy Quran: “And whatsoever you spend of anything (in the cause of Allah), He will replace it. He is the best of those who grant sustenance”. He further exhorts: Establish worship, pay the poor due (Zakat), and bow your heads with those who bow (in worship).”

As one of the pillars of Islam, it is absolutely necessary that we get it right and not try to violate the Sharia’h law when it comes to Zakat. Zakah expenditures are only for the poor, for the needy, for those employed to collect Zakat, for those in debt and for the traveler – an obligation imposed by Allah.

-> How to Calculate Zakat on Savings

There are many people who want to distribute the Zakat money amongst their employees as bonus  but due to the lack of proper knowledge on this subject gets confused whether it is permissible to give Zakat on Bonus.

First of all, in Islam Zakat is not intended for this purpose. Still it’s possible to give Zakat on bonus if one of the employees falls into the above categories. So for example, if your employee is poor or needy, then it is acceptable for you to give him Zakat. But doing it systematically for all the employees, regardless of whether they qualify for the above criteria is unacceptable and does not meet the Islamic requirements of Zakat. So in this case it won’t be considered as Zakat.

For example, a maid works at your home and you want to give her the bonus as Zakat. Now if this bonus was mentioned earlier in the contract, then this won’t be calculated as Zakat. If your maid is needy or if she has a debt then it is permissible to give her bonus as Zakat.

Similarly, when you run a company or business the bonus paid to employees during Eids or any other occasions cannot be accounted for zakat. These employees may not fall under the deserving category of people who can receive zakat.

Some of them who are working under you may have assets and savings and their assets may be obliged to Zakat. So your zakat money should not go to the rich and those who are themselves paying zakat. Again the company law should treat all the employees equally in matters of payment of bonus. So it will be difficult for you to pay bonus to one among them and deny the other. In this case Zakat seems to be inapplicable.

However, it is quite possible that some of them may be in distress and deserve to be helped. You can choose to help them individually either through arranging scholarships for their children in schools or bear the expenses of the marriage of their daughters or spend towards medical care of the ailing ones in those families or by way of paying off their debts. In this case Zakat has to be given separately and not on bonus.

It is important to realize that no matter which category you choose to pay Zakat, it must be helpful to the people in distress or pain. Zakat has been made compulsory in Islam because Zakat purifies the human personality by removing selfishness, greed and materialism. Zakat creates compassion, care, love and kindness among Muslims.

The importance of Zakat is immense in Islam which is why it is mentioned in the 82 verses of the Holy Quran to pay Zakat accordingly. Zakat is associated with prayer (Salah). It is said in the Holy Quran, Verses, 33:33, “Establish regular prayer and give Zakat; and obey Allah and His Messenger.”

The beloved Messenger of Allah (peace be upon him) is reported to have said about Zakat: Zakat is a (great and strong) bridge of Islam; If a man pays the Zakat due on his property, it causes its evil influence to vanish; Gains the pleasure of Allah; Increases wealth and protects from losses; Causes Allah’s forgiveness and blessings; Protection from the wrath of Allah and from a bad death; A shelter on the Day of Judgment; and Security from seventy misfortunes.