Zakat’s role in the UAE: Who Pays It, and How Does It Work?

The UAE’s 54 years of prosperity has seen billions of dollars quietly move across the Muslim world per annum. This has not been achieved through banks or stock markets as one may think, but through one of Islam’s five pillars: Zakat. For countless Muslims residing in the Emirates, this cannot be pushed past as just a religious obligation but instead a deeply personal act of financial responsibility. And one that causes major impacts to the market regardless of faith. Yet for something so significant, the vast majority surprisingly lack substantial awareness of exactly how it works, who it applies to, and what the UAE’s role is in organising it. 

Put simply, Zakat is one of the five pillars of Islam, alongside prayer, fasting, Hajj, and the declaration of faith. The root of the word comes from Arabic, meaning both “purification” and “growth”. These attributes stem from the idea that giving a portion of your wealth purifies the rest and allows it to grow in a spiritually meaningful way. Therefore, it is an obligatory act of charity for eligible Muslims, not a voluntary donation. Zakat is often confused with Sadaqah, which is voluntary charity. 

Eligibility comes from every Muslim adult who owns wealth above a minimum threshold known as the Nisab (currently equivalent to roughly 87 grams of gold). Crucially, that wealth must have been held for a full lunar year. Once both conditions are met, 2.5% of those total eligible assets is owed, with debts deducted before the calculation. So, on an AED 50,000 in savings, that would be AED 1,250. 

However, when analysing the UAE’s management of Zakat, it is clearly established through the formal institutional framework known as the General Authority of Islamic Affairs, Endowments and Zakat (AWQAF) and noted to founded by the Ministry of Community Development. But importantly, both UAE nationals and expatriate Muslims can pay through this fund, ensuring money reaches those eligible under Islamic law – including people in poverty, those burdened by debt, and travellers in need. Moreover, expats may also choose to send their Zakat to their home countries, provided it reaches legitimate channels. The fund then runs additional educational campaigns and offers an online calculator help ease residents into knowing exactly what they owe. 

Practical Tips 

• Zakat applies to savings, investments, gold and business assets and is not just your monthly salary 

• You can use the official calculator at the newly rebranded awqaf.gov.ae to determine your exact obligation 

• Expatriate Muslims can pay locally through the Zakat Fund/AWQAF or direct it to their home country. 

• If you are unsure whether certain assets are Zakatable, a knowledgeable scholar or Islamic finance adviser can help clarify. 
  

As awareness of Islamic financial obligations continues to grow among residents of the UAE, it is advisable for Muslim individuals to review their personal assets annually and consult the AWQAF’s official resources to ensure their obligations are met in accordance with both religious and institutional guidelines. 

Further reading: AWQAF — General Authority of Islamic Affairs and Endowments — awqaf.gov.ae