ZAKAT ON BUSINESS WEALTH
In The Name of Allah, The Most Gracious, The Most Merciful!
Being in business might involve investing money in the purchase or rent of property, furniture, and equipment. It may also involve having goods to sell. Another factor is the income generated from the business, which may be reinvested in the business or distributed to owners. Scholars classify business assets into two categories for the purpose of zakat calculation: Liquid assets that can be converted readily to cash, and fixed assets that are used to produce revenue but will not be converted to cash for more than a year.
Zakat for a business is calculated on the zakat due date (or estimated prior to that date) according to the following formula:
< Appraised Merchandise Wholesale Value (A) plus Cash on Hand and in Deposit (C) plus Good Debt Owed to Business (GD) minus Eligible Debt* times .025 equals Zakat Payment
((A+C+GD) -(ED)) x 2.5 percent = Zakat Due
*Subtract eligible debts if you follow a juristic school (madhhab) that permits debt deduction. If the balance reaches nisâb (the monetary equivalent of 85 grams of pure gold), then zakat is 2.5 percent of the balance. (Fiqh az-Zakât, 203, 213-216).
May Allah make it easy for us