Zakat on Retirement Bonus Money
Fatwa No: 400825

Question

Assalamualaikum, my father retired from his post 4 months? before and he received bonus amount after retirement so is zakat obligatory on him or not? my second question is can my wife give zakat to my brothers for completing education in Universities if my father has money ( retirement bonus) or not?

Answer

All perfect praise be to Allah, The Lord of the Worlds. I testify that there is none worthy of worship except Allah, and that Muhammad  sallallaahu  `alayhi  wa  sallam ( may  Allaah exalt his mention ) is His slave and Messenger.

As for your first question, regarding the retirement bonus which the employee cannot withdraw or use except under certain conditions, some scholars are of the view that there is no Zakat due on it.

Other scholars, such as Shaykh Ibn 'Uthaymeen, are of the view that one must pay Zakat on it for one year only. However, there are scholars who state that Zakat must be paid on it for all the previous years. Therefore, in order to be on the safe side, one should pay Zakat on it for all the previous years.

Nonetheless, it is permissible for you to follow the view of those who say that Zakat is due for one year only, as it is a strong view.

As for your second question, please send it to us independently, as per the policy of the website.

Allah Knows best.

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