Zakaat on compulsory pension/provident fund

· 26 Dhuʻl-Qiʻdah 1434 AH1 min readEnglish

Question

My company has a compulsory pension/provident fund that I am compelled to join. There is no option not to join. I was aware of it when I joined the company, and I signed all the necessary paperwork. Does it still count as a pension fund that is forced upon me, and do I still need to pay Zakaah on the payout. If Zakaah needs to be paid, then on what amount. Usually, the company takes off a certain amount off your salary, and puts it towards the pension fund. You have no access to this money while in the employ of the company. When you leave, the company subtracts off the tax portion, and then only gives you what is left. Does zakaat need to be paid on the full amount of the pension, or only the amount that is actually paid out (which has the tax subtracted)?

Answer

There is no zakaat payable on this.

And Allah Ta'ala (الله تعالى) knows best.

References (Arabic / Urdu sources)

( وسببه ) أي سبب افتراضها ( ملك نصاب حولي ) نسبه للحول لحولانه عليه ( تام ) بالرفع صفة ملك ( الدر المختار 2/259)

Answered by
Mufti Ebrahim Salejee (Isipingo Beach)
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People also ask

Is zakaat payable on pension, provident fund or retirement annuity?

“We've previously answered an inquiry regarding Zakat on voluntary retirement savings plans where the employer also contributes. For details, kindly see Ask Imam #29670.”

Ask Imaam · 41 fatawa from 7 Darul Iftas on this

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