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Sales commissions accumulating during year

Question

I work as a salesman, where I get commission on my sales. The commission is accumulated during a fiscal year, and it is paid to me only after 5-6 months from year-end. For example, I get my commission paid for the fiscal year 1997, by May 1998. Do I have to do Zakat on the value that I'm earning and when?

Answer

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

You are obliged to pay Zakah [obligatory charity] on whatever you earned from this money if it reaches the Nisaab [i.e. the minimum amount liable for Zakah] by itself or in addition to other money which you get from other resources to sources, and provided a whole lunar year elapses on it after you have possessed it.

As for the money which you earn gradually, it is better to pay Zakah on it when a whole lunar year elapses, beginning from the time of the first amount you obtained. This is better for the capital money owner and for the poor and needy people. However, if you want to pay Zakah on each amount when a lunar year elapses while it is in your possession, then you may do so.

Therefore, since you get the profit gradually, you may choose a specific month, for example the month of Ramadan, as a month for paying the Zakah. So every time this month comes, you should calculate how much money you have and pay the Zakah on it.

Allaah Knows best.

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