Do I pay zakat on money someone owes me?
Usually yes, if you expect to be repaid. Money you've lent to someone who can and will pay it back is still your wealth, so most scholars say it's zakatable, either every year or once you get it back. Money you probably won't recover is treated more gently, and many scholars say you pay nothing until it returns.
Good debts
If the borrower acknowledges the loan and is able to repay, scholars treat it like money in your bank:
- Shafi'i: include it in your zakat every year.
- Hanafi and Hanbali: you can wait until you're repaid, then pay zakat for all the years that passed.
- Maliki: when you're repaid, pay zakat for one year.
Including it every year is the simplest approach and avoids a large bill later.
Doubtful debts
If the borrower denies the loan, has disappeared or is unable to pay, many scholars say no zakat is due while it's unlikely to come back. If you're repaid later, some say you pay for one year at that point, while others say you start fresh. Either way, you're not expected to pay zakat on money you may never see. See Can I pay someone's tuition with my zakat?
Forgiving a debt as zakat?
If someone poor owes you money, you might wish to cancel the debt and count it as your zakat. Most scholars say this doesn't count, because zakat must be actually handed over. But forgiving a struggling debtor is a beautiful act in its own right:
Some scholars allow giving the debtor zakat and then letting them repay you with it voluntarily, but it must not be a pre-arranged trick.
Keeping records
Write down loans: who, how much, when and the repayment plan. It's a Quranic instruction for debts (Quran 2:282) and makes zakat easy. See How do I calculate my zakat?
- Loans you'll get back are zakatable.
- Schools differ on paying yearly or on repayment.
- Doubtful debts aren't zakatable until recovered.
- Forgiving a debt doesn't count as zakat.
People also ask
Do children have to pay zakat?
Most scholars say zakat is due on a child's savings, paid by the guardian. The Hanafi school says no. Zakat al-fitr is different.
Read the full answer →Do I pay zakat on money I'm saving for a house or wedding?
Yes. Savings for a goal still count if they're above the nisab for a year. The plan doesn't exempt the cash. Here's why.
Read the full answer →Do I have to pay zakat if I have debt?
It depends on the debt. Many scholars let you subtract debts due now, not a whole mortgage or student loan. Views differ.
Read the full answer →Do I pay zakat on my business?
Yes, on your stock for sale, cash and money owed to you, minus short-term debts. Equipment and premises are exempt.
Read the full answer →Do I pay zakat on rental property?
Not on the property's value. You pay zakat on the rent you've saved, along with your other cash. Property for resale is different.
Read the full answer →