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Zakaat on compulsory pension/provident fund

Answered according to Hanafi Fiqh by Muftionline.co.za

Q: My company has a compulsory pension/provident fund that I am compelled to join. There is no option not to join. I was aware of it when I joined the company, and I signed all the necessary paperwork. Does it still count as a pension fund that is forced upon me, and do I still need to pay Zakaah on the payout. If Zakaah needs to be paid, then on what amount. Usually, the company takes off a certain amount off your salary, and puts it towards the pension fund. You have no access to this money while in the employ of the company. When you leave, the company subtracts off the tax portion, and then only gives you what is left. Does zakaat need to be paid on the full amount of the pension, or only the amount that is actually paid out (which has the tax subtracted)?

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A: There is no zakaat payable on this.

And Allah Ta’ala (الله تعالى) knows best.

( وسببه ) أي سبب افتراضها ( ملك نصاب حولي ) نسبه للحول لحولانه عليه ( تام ) بالرفع صفة ملك ( الدر المختار 2/259)

Answered by:

Mufti Ebrahim Salejee (Isipingo Beach)

This answer was collected from MuftiOnline.co.za, where the questions have been answered by Mufti Zakaria Makada (Hafizahullah), who is currently a senior lecturer in the science of Hadith and Fiqh at Madrasah Ta’leemuddeen, Isipingo Beach, South Africa.

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