عربي
26 ربيع الأول 1441  ,  23 تشرين الثاني 2019

Fatawaa


Fatwa Number : 3320

Subject : Zakah on Severance Pay, Retirement and Savings Compensation

Classified : Current Issues concerning Zakat

Fatwa Type : Search Fatawaa


Question :

What is the Islamic ruling on the Zakah on severance pay, retirement compensation, pensionable salaries, and savings compensation?


The Answer :

All perfect praise be to Allah, The Lord of the Worlds, and may His peace and blessings be upon our Prophet Muhammad and upon all of his family and companions.
The above compensations go under the umbrella of a social insurance system governed by regulations that make an employee`s best interest a first priority where monthly deductions from his salary are tantamount to insurance installments that become his once he receives them(Possess them).
Accordingly, Zakah(Obligatory charity) is only due on the above along with their revenues when they reach Nisaab(Minimum amount liable for Zakah) and one lunar year elapses on possessing them. During its sixteenth session, the International Islamic Fiqh Academy adopted a resolution that read as follows: " Zakah of severance pay and retirement compensation isn`t due on an employee during his service because these sums aren`t actually received by him(not in his possession)."
Similarly, Zakah is only due on pensionable salaries when they reach Nisaab and one lunar year elapses on them while in an employee`s possession.
As regards the compensation from the savings fund, if the employee can take it whenever he wants, then he should pay its Zakah every year, but if he can`t, then it takes the same ruling as the that of severance pay(Zakatable when reaches Nisaab and one lunar year elapses on it). And Allah knows best.




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