Zakat on Debts

প্রশ্ন · Question

Assalamu Alaikum wa Rahmatullahi wa Barakatuh,
I work in one of the Palestinian universities, and often work overtime
but we do not receive the overtime pay, rather it is held by the
university as a debt they owe, and perhaps the credit of one for us
(workers) may far exceed the quorum (nisab) of Zakat (due to years
of overtime). And this debt is not considered a dead debt, but is
recoverable, however the timing for receiving it is not known. For
example, I did not receive overtime payment for four years yet; I do
not know when I will receive it.
Is there Zakat for this money or not? And if there is Zakat, is it
payable in a lump sum when received, or is it for every year?
Note: Many of the instructors are puzzled on this issue and seek a
comprehensive answer.... May Allah reward you.

উত্তর · Answer

Wa Alaikum Assalam wa Rahmatullahi wa Barakatuh,
I understand from your question that the entitlement for overtime
pay is agreed with the university, that you deserve for this work a
specific pay given to you upon completing the work, but if they do
not give it to you at the time, it becomes debt on them ... and it is not
a "tip" or a bonus because you volunteered to do extra work, such
that they give you what they want, a little or a lot, or not give you at
all... If my understanding this is true, then the answer to your
question is mentioned in the book of Funds in the Khilafah
"Caliphate" State (Al-Amwal fi Dowlat Al -Khilafah "Caliphate") in the
following text:

(... Where a person is a creditor of a debt to a non -deferring rich
person who is able to repay it at any time, it is obliged upon him to
pay Zakat on that debt when a year passes over it. Ibn Obaid
narrated from ‘Umar ibn Al -Khattab who said: “When Sadaqah
becomes due, count your debts and what you have as one whole
then pay its Zakat.” Uthman b. Affan said: “Sadaqah is obliged upon
the debt which you could collect from the debtor if you want, and
that debt which is on someone who delays repayment and you leave
it due to shyness or as a favour; in it is Sadaqah.” Narrated by Abu
Obeid, who also narrated from Ibn ‘Umar said: “On each of your
debts in which you expect repayment you must pay Zakat whenever
the year passes over it.”
However, where the debt is owed by a poor person in hard
circumstances, or a deferring rich person, it is not obliged upon the
creditor to pay its Zakat until it has been repaid. After it has been
repaid he gives all that was obliged upon him over the years.
Regarding a doubtful debt i.e. one in which the creditor is not sure if
it will be resolved or not. Ali said: “If he is honest let him pay the
Zakat once it has been restored for the period.”
Narrated by Abu Obeid, who also narrated from Ibn Abbas said
regarding debts: “If you don’t expect to receive it, don’t pay its Zakat
until you get it. When you receive it, pay all that is upon it.”.) End of
what was mentioned in the book Funds in the Khilafah "Caliphate"
State.
Accordingly, your pay which is withheld by the university as a credit
for you on them, the Zakat on this pay is not necessary to be paid
now, but it must be given when you receive your pay from the
university because you do not know when you will take it. That is,
you cannot request it from the university and take it from them
whenever you want. As long as this is the case, the Zakat on this
money becomes obligatory on you when you receive the pay and by

then, you pay Zakat for the past years as from the time your money
reached the Nisab (quorum) and a year has passed over it. That is, it
is obligatory to pay Zakat for all the years after the passing of a year
from owning the Nisab, and not only to pay its Zakat for one year,
but for all the years after the Nisab passed a year...
I ask Allah to bless you in your money, family and children.
Your brother,
Abu Yasin
03rd Dhul Qi’dah 1437 AH
06/08/2016 CE