Do I pay zakat on money that was lost or stolen?

Why lost money isn't zakatable

Zakat is a share of wealth that is yours, in your control, above the nisab, for a full lunar year. The Prophet ﷺ taught that no zakat is due on wealth until a year has passed over it (Sunan Abi Dawud 1573). Money that was stolen, lost on a train or frozen in a scam you can't recover is not something you can spend or grow, so classical scholars call it mal dimar: "hidden" or "dead" wealth. You don't count it in your zakat while it is gone.

So if £2,000 was stolen from your account and the bank refuses to refund it, leave that £2,000 out of this year's calculation. Count only what you actually have. See How do I calculate my zakat?

What if the money comes back?

This is where the schools differ:

• Hanafi: no zakat for the years it was gone. A new zakat year starts once it is back with you (or it joins your existing zakat year if you already have nisab).
• Maliki: pay zakat for one year only when you get it back.
• Shafi'i, and one Hanbali view: pay for all the past years, because it never stopped being your property.

Many scholars today lean toward the Hanafi or Maliki position, since you had no benefit from the money. If you prefer to be extra careful, paying one year is a fair middle path. This works much like a debt that is unlikely to be repaid. See Do I pay zakat on money someone owes me?

Insurance, refunds and chargebacks

If your bank or insurer refunds you, the refund is simply money you now own. Add it to your savings and it is counted on your next zakat date like everything else. You don't need to backdate it.

One special case: if zakat was already due and you kept delaying it, and then the money was lost, many scholars say you still owe that zakat, because the delay was your choice. If it was lost before you had any real chance to pay, most say you are excused.

Loss is not wasted

Losing money hurts. The Prophet ﷺ said that no tiredness, illness, worry or grief afflicts a Muslim, even the prick of a thorn, without Allah removing some of his sins because of it (Sahih al-Bukhari 5641). Report the theft, take sensible steps to recover it, and trust that Allah sees what you went through.