Jamiatul Ulama KZN

Zakaat on pension fund withdrawal

· 9 Rabiʻ II 1436 AH1 min readEnglish

Question

i intend leaving my employer at the end of the year for another employment, inshAllah.

How do I calculate my pension fund withdrawal. I have been working at my current employer for 4.5 years.

Should i calculate 2.5% on my withdrawal amount or should i work out the zakaah on each year going back.

What is the permissibility of the growth on the contributions.

This was a compulsory fund administed by Momentum pension funds

Answer

In the Name of Allah, the Most Gracious, the Most Merciful.

As-salāmu ‘alaykum wa-rahmatullāhi wa-barakātuh.

Since the pension in reference is mandatory and you do not have any control over the investments, then the income you receive from this plan will be halal for you to take. The final amount you receive will be counted as part of your salary[1]including all extra amounts you receive upon leaving the company.[2]

With regards to Zakāt on mandatory pension funds, you are neither obligated to pay Zakāt for the previous years nor upon receiving the money. There is no separate Zakāt for monies invested in a mandatory pension fund.[3] At the end of your Zakāt year, the pension amount that you have withdrawn, should be added to your assets and Zakāt should be calculated in accordance to that.

And Allah Ta’āla Knows Best

Note: Some ‘Ulamā opine for the view that all extra amounts will be considered as goodwill (tabarru’) from the company. For more information, see:

References (Arabic / Urdu sources)

[1]ثُمَّ الْأُجْرَةُ تُسْتَحَقُّ بِأَحَدِ مَعَانٍ ثَلَاثَةٍ إمَّا بِشَرْطِ التَّعْجِيلِ أو بِالتَّعْجِيلِ أو بِاسْتِيفَاءِ الْمَعْقُودِ عليه فإذا وُجِدَ أَحَدُ هذه الْأَشْيَاءِ الثَّلَاثَةِ فإنه يَمْلِكُهَا كَذَا في شَرْحِ الطَّحَاوِيِّ (الفتاوي الهندية، ج ٤، ص ٤١٣، مكتبة رشيدية)؛

قالَ – رَحِمَهُ اللَّهُ – (وَالْأُجْرَةُ لَا تُمْلَكُ بِالْعَقْدِ بَلْ بِالتَّعْجِيلِ أَوْ بِشَرْطِهِ أَوْ بِالِاسْتِيفَاءِ أَوْ بِالتَّمَكُّنِ مِنْهُ) أَيْ لَا تُمْلَكُ الْأُجْرَةُ بِنَفْسِ الْعَقْدِ سَوَاءٌ كَانَتْ الْأُجْرَةُ عَيْنًا أَوْ دَيْنًا، وَإِنَّمَا تُمْلَكُ بِالتَّعْجِيلِ أَوْ بِشَرْطِ التَّعْجِيلِ أَوْ بِاسْتِيفَاءِ الْمَعْقُودِ عَلَيْهِ وَهِيَ الْمَنْفَعَةُ أَوْ بِالتَّمَكُّنِ مِنْ اسْتِيفَائِهِ بِتَسْلِيمِ الْعَيْنِ الْمُسْتَأْجَرَةِ فِي الْمُدَّةِ

(تبيين الحقائق، ج ٥، ص ١٠٧، مكتبة إمدادية)

[2] Nizamul Fatawa, vol. 1, pg. 208, Maktabah Rahmaniyyah;

Fatawa Haqqaniyyah, vol. 6, pg. 212, Jami’ah Darul Uloom Haqqaniyyah;

Jawahirul Fiqh, vol. 3, pg. 258, Maktabah Darul Uloom Karachi;

Fatawa Mahmudiyyah, vol. 16, pg. 395, Darul Iftaa Jami’ah Faruqiyyah;

Fatawa Rahimiyyah, vol. 9, pg. 271, Darul Isha’at;

Kifayatul Mufti, vol. 8, pg. 95-98, Darul Isha’at

Jadeed Fiqhi Masaail, vol. 1, pg. 293, Zam Zam Publishers and Islam Aur Jadeed Ma’ashi Masaail, vol 4, pg. 86, Idara-e-Islamiat

[3] المبسوط للسرخسي (2/ 195) [دار النوادر]

ثُمَّ الدُّيُونُ عَلَى ثَلَاثِ مَرَاتِبَ عِنْدَ أَبِي حَنِيفَةَ – رَحِمَهُ اللَّهُ تَعَالَى -: دَيْنٌ قَوِيٌّ وَهُوَ مَا يَكُونُ بَدَلًا عَنْ مَالٍ كَانَ أَصْلُهُ لِلتِّجَارَةِ لَوْ بَقِيَ فِي مِلْكِهِ، وَدَيْنٌ وَسَطٌ وَهُوَ أَنْ يَكُونَ بَدَلًا عَنْ مَالٍ لَا زَكَاةَ فِيهِ لَوْ بَقِيَ فِي مِلْكِهِ كَثِيَابِ الْبِذْلَةِ وَالْمِهْنَةِ، وَدَيْنٌ ضَعِيفٌ وَهُوَ مَا يَكُونُ بَدَلًا عَمَّا لَيْسَ بِمَالٍ كَالْمَهْرِ وَبَدَلِ الْخُلْعِ وَالصُّلْحِ عَنْ دَمِ الْعَمْدِ فَفِي الدَّيْنِ الْقَوِيِّ لَا يَلْزَمُهُ الْأَدَاءُ مَا لَمْ يَقْبِضْ أَرْبَعِينَ دِرْهَمًا فَإِذَا قَبَضَ الْمِقْدَارَ أَدَّى دِرْهَمًا وَكَذَلِكَ كُلَّمَا قَبَضَ أَرْبَعِينَ دِرْهَمًا، وَفِي الدَّيْنِ الْمُتَوَسِّطِ لَا يَلْزَمُهُ الْأَدَاءُ مَا لَمْ يَقْبِضْ مِائَةَ دِرْهَمٍ فَحِينَئِذٍ يُؤَدِّي خَمْسَةَ دَرَاهِمَ، وَفِي الدَّيْنِ الضَّعِيفِ لَا تَلْزَمُهُ الزَّكَاةُ مَا لَمْ يَقْبِضْ وَيَحُولُ الْحَوْلُ عِنْدَهُ.

Answered by
Nabeel Valli (Student Darul Iftaa)
Checked & approved by
Mufti Ebrahim Desai
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Source: Jamiatul Ulama KZN — https://jamiat.org.za/zakaat-on-pension-fund-withdrawal-2/
Fatawa SA: https://fatawa.co.za/fatwa/jamiat-15031

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