Q: I have a retirement fund called 401K where I contribute certain amount of money every bi-week and the employer matches certain percentage. I can withdraw the money if I wish but before the age of 59 and half if the money is withdrawn there is a penalty and tax burden involved. The question is whether I have to pay zakaah on the this and if I have to what would be the correct way to do this?
A: You will pay zakaat in proportion to your contributions.
And Allah Ta’ala (الله تعالى) knows best.
قال الحصكفي: وشرط افتراضها عقل وبلوغ وإسلام وحرية … وسببه أي سبب افتراضها ملك نصاب حولى نسبة للحول لحولانه عليه، قال الشامي تحت قوله نسبة للحول: أي الحول القمري لا الشمس اهـ (شامي 2/258)
Answered by:
Mufti Ebrahim Salejee (Isipingo Beach)