:: Zakat - Another Project by MUIS ::

Zakat on wealth comprises several sub-categories, namely zakat on savings, zakat on gold, zakat on business, zakat on CPF savings and zakat on shares.

Zakat is computed based on the net amount in the ordinary account. Please see below for the basis of the computation.

Medisave Account
Money from the medisave account cannot be withdrawn and its use is restricted to what has been determined by the CPF board. The money from the medisave account is not accountable for zakat because it is an incomplete possession.
Ordinary Account
Money from the ordinary account is eligible for zakat when nisab is reached and haul is completed. This means that zakat is obligatorily to be paid each year when nisab and haul is completed, although the money is still in the CPF fund.
Fatwa decision
Muslim workers' are obliged to pay zakat for their CPF contributions when nisab is reached and haul is completed.

Zakat on CPF Savings

The latest Fatwa regarding zakat on CPF is as follows:

1. A person who receives CPF monies and is living comfortably, it is wajib upon him to pay zakat in the form of arrears.

2. A person who feels that when he pays zakat in the form of arrears, it causes him great hardship then it is upon him to pay zakat as 2.5% of the amount he receives from his CPF savings.

QUANTUM OF ZAKAT PAYABLE

2.5% on CPF savings upon completion of haul and nisab. The amount may be paid
(a) Annually, or
(b) Retrospectively upon withdrawal of savings.
(c) Only the amounts in the Ordinary accounts need to be computed. Amount in the ‘Medisave’ account and Special Accounts are not factored in.

COMPUTATION METHOD

First Approach

Mr Ali, aged 55 years old, had worked for 15 years before withdrawing his CPF savings. His CPF can be withdrawn in 2004.
Nisab = $1500 for every year (example)

Year	Ordinary Account S$ (A)	Interest S$ (B)	AccumulatedPrevious Years’ Zakat S$ (C)	Total S$ (A-B-C)	Zakat Payable $
1990	29,958.38	1,542.03	0.00	28,416.35	710.41
1991	28,891.53	1,020.52	710.41	27,160.60	679.02
1992	32,398.73	905.03	1,389.43	30,104.27	752.61
1993	36,436.61	1,077.79	2,142.04	33,216.78	830.42
1994	41,244.46	1,429.89	2,972.46	3,6842.11	921.05
1995	47,612.56	2,002.93	3,893.51	41,716.12	1,042.90
1996	54,321.14	1,927.74	4,936.41	47,456.99	1,186.42
1997	61,642.42	1,452.20	6,122.83	54,067.39	1,351.68
1998	73,177.39	1,625.98	7,474.51	64,076.90	1,601.92
1999	87,982.30	2,711.38	9,076.43	76,194.49	1,904.86
2000	78,486.44	2,891.08	10,981.29	64,614.07	1,615..35
2001	93,060.31	2,912.65	12,596.64	77,551.02	1,938.78
2002	92,090.23	1,855.22	14,535.42	75,699.59	1,892.49
2003	106,474.34	3,335.53	16,427.91	86,710.90	2,167.77
2004	120,924.86	2,800.26	18595.68	99,528.92	2,488.22
TOTAL AMOUNT OF ZAKAT TO BE PAID					21,083.90

Second Approach

Amount of CPF Savings withdrawn in 2004 = $120,924.86
Amount of Zakat payable = 2.5% x $120,924.86
= $3,023.15