# Abdur Rahman ibn Yusuf Mangera – Q&A- Zakat on Shares

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How do you calculate Zakat on shares?

Zakat on shares is calculated based on the

Zakatable value of each company.

So when you have a lot of shares,

the way it works is that you actually

become like a minority shareholder.

That's what it is really, especially we're doing

long-term shareholding.

So now in a company, not everything is

Zakatable.

The fixed assets like a building and cars

and trucks, machinery, that will not be Zakatable

in any business.

What is Zakatable in a business is the

inventory, the raw products and the liquid assets.

So you have to determine that for each

company.

Now if you've got many, many shares, it's

difficult to go and look into reports and

balance sheets and things like that and sometimes

people don't even understand that.

So many of the contemporary ulama, they've given

a formula to figure that out.

And the formula is that you take all

of your shares and let's just say you've

got 2,000 pounds worth of shares.

Or let's just say 1,000 for the

sake of ease, 1,000 pound worth of

shares.

You will pay Zakat on 40% of

the assets.

40% because generally in a business, you

would say that 40% are Zakatable assets

and 60% are not.

So you can ignore the 60%.

So you will have to pay Zakat of

2.5% on 40% of your

entire holding.

So on 1,000, 40% of that

would be 400 pounds.

So you would pay Zakat on 400 pounds.

Zakat on 400 pounds is 2.5%

or 1 40th which would be how many

pounds?

It would be 10 pounds.

So really the easier way to do it

is that rather than work out 40%

of your total holding and then 2.5

% of that, there's an easier shortcut which

is that you just look at 1%

of the entire holding.

Because if we take the example of 1

,000 pounds, 40% of that is 400

and 2.5% which is 1 40th

is 10 pounds.

10 pounds is also 1% of 1

,000.

So I just told you why it's 1%,

sorry why you take 1% is because

actually 2.5% of 40% but

it's difficult if you've got many assets to

look at like that.

So what you just do is simply, you

just take the whole amount and say what's

1% of that and that's my Zakat

of it.

The point of a lecture is to encourage

people to act, to get further, an inspiration,

an encouragement, persuasion.

The next step is to actually start learning

seriously, to read books, to take on a

subject of Islam and to understand all the

subjects of Islam at least at their basic

level so that we can become more aware

of what our Deen wants from us.

And that's why we started Rayyan courses so

that you can actually take organized lectures on

demand whenever you have free time especially for

example the Islamic Essentials course that we have

on there, the Islamic Essentials Certificate which you

take 20 short modules and at the end

of that inshallah you will have gotten the

basics of most of the most important topics

in Islam and you'll feel a lot more

confident.

You don't have to leave lectures behind, you

can continue to listen to lectures but you

need to have this more sustained study as

well.

Jazakallah Khair and Assalamualaikum Warahmatullahi Wabarakatuh.