Zakāt for business owners in Canada

Business owners face a more involved calculation than salaried earners, because zakāt applies to business assets, not just personal savings. Here is the general framework.

What's zakatable in a business

The core principle: zakat is due on assets held for trade and on liquid wealth, not on the tools used to run the business. Zakatable items typically include cash on hand and in business accounts, the value of inventory and goods held for sale, and money owed to you that you reasonably expect to recover (receivables).

What's generally not zakatable

Fixed assets used to operate (premises, machinery, vehicles, computers, fixtures) are usually not zakatable, because they aren't held for resale. They generate income but aren't themselves trade goods.

Liabilities

Immediate business debts and payables due can generally be deducted from your zakatable total, following the same logic as personal liabilities.

A Canadian wrinkle

Business structures here (sole proprietorship, incorporation) don't change the underlying fiqh, but they affect how you read your own books. Use your balance sheet to separate trade assets from operating assets. For inventory, scholars generally use current market or sale value at your zakat date, not original cost. Retained earnings sitting as cash are zakatable; equipment is not.

Bottom line

Add zakatable cash, inventory at current value, and recoverable receivables; subtract immediate liabilities; if the result is above niṣāb and a hawl has passed, 2.5% is due. Because businesses vary widely, this is exactly the kind of calculation worth reviewing with a scholar familiar with commerce.