I have just converted to Islam, and want to pay Zakāh in the way prescribed by Islam. Please advise.
You can calculate Zakāh in the following manner:
1. Fix any one day of the year for the calculation of Zakāh. On all subsequent years, Zakāh should be calculated on this day.
2. Subtract the value of 612 grams of silver from your total wealth on this particular day which includes value of your jewelry not worn everyday, value of other assets which are not of personal use (your personal house and car are examples of assets in personal use).
3. 2 1/2 % of this amount is the Zakāh to which you are liable. In case you are a salaried person you should also pay 10 %1 of your salary every time you receive it. You can deduct the amount the government has fixed as exemption to salaried persons and then pay the said percentage of the remaining amount as Zakāh.
Remember, if it is not possible to pay your Zakāh money in one go you can pay in installments as well.
4. Since Zakāh is the only tax which a government can impose on its citizens, you can deduct other taxes that you have paid from the your Zakāh amount. If the balance is negative you do not have to pay Zakāh.
1. If the basis of the Sunnah established in Zakāh is taken into consideration, production of all forms based on various skills must be classified as produce and not as wealth; therefore, its rates and nisāb should be those specified by the Prophet (sws) for land produce. Consequently, Zakāh on items which are produced such that the basic factor in producing them is either labour or capital is 10 % (in the case under question it is just labour).