The Mufti Explains: Is Zakat Obligatory on Monthly Interest?
Sheikh Oweida Osman confirmed that salaries and pensions are not subject to zakat, which is only due on saved money that reaches the nisab and completes a lunar year, including any interest earned.
Sheikh Oweida Osman, Fatwa Secretary at Dar Al-Ifta, explained the ruling on paying zakat on monthly interest, stating that salaries and pensions are not subject to zakat. Zakat applies to saved money if it reaches the nisab and completes one lunar year.
He clarified that monthly interest does not have separate zakat but should be added to the principal at the end of the year. If the total amount reaches the nisab, zakat of 2.5% is due. For example, if money is deposited in a bank and earns monthly interest, the interest is added to the principal, and at the end of the year, if the sum reaches the nisab, zakat is calculated on the total.
Sheikh Oweida also highlighted the virtues of timely zakat payment: completing faith, obeying Allah, strengthening social bonds, purifying the soul, fostering generosity, increasing blessings in wealth, protecting against miserliness, fostering community cohesion, and serving as a means of entering Paradise and protection from the heat of the Day of Judgment.
He warned of the consequences for withholding zakat in the Hereafter, where wealth becomes a form of punishment, as described in the Quran and authentic Hadiths. In this world, those who withhold zakat are deprived of blessings in their wealth and may face poverty, need, and illness.
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