Asalamualaikum! I hope everyone has had a productive Ramadan and are blessed these last few nights.
My question is nearly identical to this one asked several years ago, with a few differences. Rather than reviving an old thread, I’m asking this as a new question.
I am currently investing with Wahed Invest I have one Individual account that is positioned as Moderately Aggressive. I also have one Traditional IRA that is also Moderately Aggressive.
How do I calculate the Zakat owed on my Wahed Invest Portfolio?
I’ve tried reaching out to their Customer Service, but it was not helpful. Their response was:
Please note that for this year, Zakat emails will no longer be sent however, the Zakat Calculator will be available on the Wahed website.
We will let you know once this functionality is available so you can calculate your account.
I have not received any updates from them since. Considering Ramadan is almost over, and many people offer their Zakat during this month, I would have figured the calculator would be available by now, but I was not able to find it on their site.
I’ve received a lot of conflicting information online on how to calculate Zakat for investments, and would greatly appreciate any insight from a qualified individual here.
Bonus points if you can show an example calculation, such as the Individual account currently having $40000 USD and the Traditional Account having $100000 USD.
Jazakallah Khair. May Allah SWT accept from all of us.
It seems they did eventually launch their calculator but the Zakat value doesn’t change despite changing the type of portfolio. I’m not sure if that is intentional or if it’s broken
It does appear to be intentional because at the bottom of the calculator they link to this Fatwa (PDF), that indicates all the listed asset classes are calculated with 100% of the Zakat rate.
If my understanding is correct, that would be 2.5% for everything, explaining why it doesn’t change regardless of portfolio type. Allah (SWT) knows best.
I got in touch with them regarding their calculator and this was the response:
This year, we’ve adopted the calculation method outlined by Sheikh Sajid in our Zakat Webinar, resulting in some differences from last year’s calculations. As per the webinar, for gold and cash holdings, Zakat is set at 2.5% of their combined value. For Sukuk and stock funds, the Zakat is calculated as 2.5% of 30% of their respective market values.
Last year, we followed the National Zakat Foundation’s guidance and used 25% as a representative value for stocks and shares when calculating Zakat. However, this year, based on Sheikh Sajid’s expertise from his various Shariah council roles, we are advised to use 30% as a more accurate estimate.
Similarly, for Sukuk, we previously considered it safer to pay Zakat on the full amount. But this year, thanks to Sheikh Sajid’s insights into the investments within the Sukuk funds, we’ve determined that a 30% proxy is the most suitable approach.
Calculating Zakat remains straightforward. In your app, choose the account you want to calculate Zakat for by selecting it under ‘Your Accounts.’ Then, click ‘Positions’ to view the distribution of your funds across various asset classes.
For gold and cash, add their total value and multiply by 2.5% to calculate Zakat. For stocks and sukuk, sum their total value, find 30% of that amount, and then multiply by 2.5% to determine the Zakat payment.