Zakat (Arabic: زكاة zakāt, “that which purifies” also Zakat al-mal زكاة المال, “zakat on wealth”,or “Zakah” is a form of alms-giving treated in Islam as a religious obligation or tax, which, by Quranic ranking, is next after prayer (salat) in importance.
As one of the Five Pillars of Islam, zakat is a religious obligation for all Muslims who meet the necessary criteria of wealth. It is not a charitable contribution, and is considered to be a tax, or obligatory alms. The payment and disputes on zakat have played a major role in the history of Islam, notably during the Ridda wars.
Zakat is based on income and the value of all of one’s possessions. It is customarily 2.5% (or 1/40th) of a Muslim’s total savings and wealth above a minimum amount known as nisab, but Islamic scholars differ on how much nisab is and other aspects of zakat. The collected amount is paid first to zakat collectors, and then to poor Muslims, to new converts to Islam, to Islamic clergy, and others.
Today, in most Muslim-majority countries, zakat contributions are voluntary, while in a handful (Libya, Malaysia, Pakistan, Saudi Arabia, Sudan, and Yemen), zakat is mandated and collected by the state.
Shias, unlike Sunnis, have traditionally regarded zakat as a private and voluntary decision, and they give zakat to imam-sponsored rather than state-sponsored collectors.