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Requires detailWorship · Zakat

Is The Profit and Loss Account Used For Zakat Calculation?

Answered by Mufti Faraz Adam · · 23 Dhuʻl-Hijjah 1442 AH

The answer

A company’s Profit and Loss Account is irrelevant for Zakat calculation. A company may have had a net loss but yet be required to pay Zakat. Zakat is not dependent on profits; rather, Zakat is calculated on the current Zakatable assets of a company. Therefore, to calculate Zakat, a company will use the Balance Sheet to determine net Zakatable assets in the company.

In short: Zakat uses the balance sheet, not the profit and loss account.

And Allah knows best.

Mufti Faraz Adam

Based on the Hanafi school and on the question as it was asked. Another mufti may reach a different conclusion. Read the disclaimer.

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