Factors Affecting Zakat on Earnings Payment among Staff of Higher Educational Institution

Factors Affecting Zakat on Earnings Payment among Staff of Higher Educational Institution

Nor Aini Hassanuddin¹, Rubiah Abu Bakar², Rohayati Mat Ripin³, Nor Shaifura binti Musilehat⁴

^1,3Faculty of Computer and Mathematical Sciences, Universiti Teknologi MARA Cawangan Terengganu

²Academy Contemporary of Islamic Studies, Universiti Teknologi MARA Cawangan Terengganu

⁴Academy of Language Studies, Universiti Teknologi MARA Cawangan Terengganu

DOI: https://dx.doi.org/10.47772/IJRISS.2025.906000112

Received: 29 May 2025; Accepted: 31 May 2025; Published: 02 July 2025

ABSTRACT

Zakat on earnings is a controversial issue, with different academics and schools of thought holding opposing views on its zakatability, assessment, rate, and admissible deductions. This can cause misunderstanding and inconsistencies in practice. Therefore, this paper seeks to investigate the factors affecting zakat on earning payment among the staff in Higher Educational Institutions at Terengganu.

This study’s survey approach collects primary data using online questionnaires. Staff from Terengganu’s higher education institutions were provided access to an online survey. The researcher developed the questionnaire by using Google Forms and distribute the link to collect responses and information from the participants. The staff’s understanding of zakat on earnings is determined using descriptive analysis while regression analysis is used to analyse the factors influence the zakat on earning payments.

The study discovered that the staff had an extensive knowledge of their need to pay zakat on their earnings. This understanding indicates that they are well-versed in the ideas and requirements of zakat, a type of almsgiving in Islam that is mandatory for Muslims who meet specific financial conditions. This high degree of awareness demonstrates a dedication to Islamic principles and contributes to the organization’s overall ethical and spiritual circumstances. The study also reveals that understanding and knowledge of zakat have significant effects on the payment of zakat on earnings.

To eradicate poverty and improve the standard of living in the community, it is imperative that the notion of zakat on earnings be clarified. It is anticipated that this increased awareness will result in more zakat collections, which will benefit more asnaf (eligible receivers) and reduce the rate of poverty.

The study’s findings highlight the impact of zakat on earnings particularly in the knowledge, understanding and attitude of zakat payers in higher education, which eventually serves as one of Terengganu’s possible zakat sources, supporting the country’s social cohesion and economic stability. Effective collection and distribution of zakat funds can provide essential services, ultimately improving the quality of life for individuals within the community.

Keywords-factors, zakat, zakat on earnings, higher education

INTRODUCTION

Zakat on earnings, also known as “zakat al-mal,” is a type of charitable giving in Islam that is meant to purify one’s wealthy and contribute to those in need. It incorporates professional fees, employment compensation, salaries, wages, bonuses, donations, gifts, and dividend income [1]. In Malaysia, there is a difference of opinion, polemic and debate related to the issue of zakat. The zakat issues include aspects of the type of zakat property, expansion of zakat resources, zakat assessment methods, zakat conditions and the expansion of the concept of zakat asnaf. Zakat on earnings or employment is one of the issues that is still being discussed by scholars and intellectuals. Although the legal basis of this issue is agreed upon by many Islamic intellectuals, differences and polemics exist in debating its implementation [2]. Different states in Malaysia have varying levels of enforcement and implementation of their own rulings. Due to this differing setting, zakat on earnings is currently, at least in Malaysia, are considerably less regulated requirement [3]. Hence this paper seeks to investigate the potential factors contribute towards zakat on earning payments.

LTERATURE REVIEW

Zakat is a charitable practice that urges Muslims to help the less fortunate. This upholds the Islamic principle of looking out for others and taking responsibility for the well-being of the community. Zakat is regarded as an act of purifying one’s wealth and assisting in the eradication of selfishness and greed. Muslims are encouraged to focus on the needs of others and to be thankful for what they have by donating a portion of their fortune. One way to do so is by paying zakat on earnings.

Wages and professional salaries are frequently used interchangeably with income, especially when discussing zakat. In Malaysia, through the Muzakarah of the Fatwa Committee of the National Council for Islamic Religious Affairs, Malaysia has established the obligation to pay zakat on earnings through a series of fatwas that include the law, conditions and rates to be paid by those who meet the conditions (JAKIM, 2015). The collection of zakat increased after various awareness campaigns were carried out. Individuals who are capable should make a small distribution from their wealth by paying zakat to help the deserving asnaf. In general, zakat is the best way to make that distribution [4]. Therefore, the case for the consideration of institutionalized almsgiving (Zakat) as a form of socio-economic tool for reducing poverty is inescapable as it is tied with wealth and income redistribution.

The study done by ([5],[6]) concluded that there are three general views about the obligation of zakat on salary income. The first view states that there is no argument of obligation to pay zakat for salary income. Therefore, income is not mandatory, but the Muslim community is encouraged to pay it. The second general view is the group that agrees that there is no proof that zakat is obligatory for salary income, but it becomes obligatory because of maslahah which is the welfare of the ummah. It is seen in terms of zakat collection which will increase and benefit Muslims. The third view is the group that thinks that zakat is obligatory on salary income because of evidence in the Quran and Sunnah that the word salary is not precisely stated but the interpretation can be extended to the meaning of salary income.

Among other issues that deserve to be highlighted is the issue of nisab. What is the appropriate nisab for salary zakat. There is a view that states that zakat on earnings is according to the nisab of agricultural zakat. However, this cannot be accepted because the basis of zakat on earnings (in the form of money) and agriculture (plants and fruits) is different. Syarak has a specific objective in determining the nisab for agricultural zakat, which is the assessment of human life resources (ie food), while al-Mustafad’s property is usually in the form of money, therefore determining the nisab rate according to currency zakat is more relevant [7]. Money from income (salary) is not valid for issuing zakat when salary is received. On the other hand, the excess money from the income must be combined first with the money that was already owned before (savings). Once the total amount is sufficient, i.e. reaching the nisab and passing the haul on it, then it is obligatory to issue zakat at the rate of 2.5% [8].

The Selangor State Government has gazetted a fatwa on the obligation of zakat on earnings  on 9 May 2001 and paid it to the Selangor Zakat Center. The zakat on earnings payment method is through the Salary Deduction Scheme (SPG) by the Selangor Zakat Board (LZS). This method is implemented by doing salary assessment, which is the amount of zakat on earnings per year (2.5% X total income per year) divided by 12 months (Selangor Zakat Board, 2006). There are several methods of zakat on income assessment, namely Kedah without deducting basic needs where [2.5% X gross annual income] is divided by 12 months, or a method by doing basic deduction where 2.5% of gross annual income has been deducted some allowed expenses (self-own, wife, children, EPF) and divided by 12 months. The next method is to deduct actual expenses that cover basic needs (food, clothing, medical, transportation, education and shelter), and 2.5% of the balance (if the nisab is sufficient) will be divided by 12 months [9].

The Fatwa decided by the Mufti and the Selangor Sharia Law Consultative Committee is seen to be different from what was decided by the Mufti and the Perak State Sharia Committee. The decision of the fatwa regarding zakat on earnings in the State of Perak is as follows (efatwa. gov): “That salary or income is included in the category of obligatory zakat when sufficient nisab and haul is a condition agreed upon by Jumhur Ulama in the four madhabs. This condition does not apply to salary or income, so salary or income is not obligated to zakat.”

The similarity of the fatwas between these two states declare that income or salary is obligatory for zakat. However, the difference that occurs is from the point of determining the haul and nisab, the Perak State Shariah Committee insists that zakat on earning is obligatory only when there is enough haul and nisab [10]. While the Selangor State Sharia Law Consultative Committee issued a fatwa on the obligation of zakat without setting the condition of sufficient haul and nisab, moreover the Selangor Zakat Board implements zakat collection before sufficient haul and before sufficient nisab.

Zakat regulations, quality service, promotion disclosure, three aspects of attitude, and knowledge are the seven factors that are positively correlated with the compliance behaviour to pay zakat on income [11]. The concept of zakat needs to be clarified to increase its acceptance within the Muslim community. The Malaysian zakat system will be more effective in bolstering the ummah’s economy if Muslims can be sufficiently understood about zakat [12]. The study done by [13] found that the rise in income zakat payments is correlated with religion and understanding of zakat. People may feel more driven to carry out their obligations if they have a better understanding of zakat, particularly if they are aware of how it helps to lessen poverty and inequality in society. Solid comprehension of the basic elements of income zakat payment, indicating a positive degree of understanding of zakat on income. On the other hand, little is known about income zakat and how it relates to non-fixed monthly income sources including compensation, bonuses, and allowances [14]. Therefore, it may be said that although most individuals comprehend the fundamental ideas of income zakat, this comprehension is by no means definitive. As a result, it is imperative that pertinent parties make constant efforts to educate the Muslim community working in a variety of areas about income zakat.

Nevertheless, given the emphasis that Islam places on Zakat as its third pillar, as well as the numerous benefits that come with it, the question has been raised as to why Muslims reject paying Zakat. Compared to the 28.3 million Muslims who make up the country’s entire population, only a small percentage of Malaysians pay zakat [15]. Several studies have empirically confirmed the influence of attitudes on actual behaviour [16]. Attitude has been categorised as one of the three internal elements contributing to an individual’s Zakat compliance behaviour; the other two are religiosity and knowledge which positively related to Zakat compliance behaviour [17]. A firm or individual’s attitude towards Zakat can have a favourable impact on their Zakat compliance behaviour. A positive attitude frequently leads to improved understanding, more dedication, and proactive action in completing Zakat requirements, ensuring that businesses satisfy their religious and social responsibilities effectively. Moreover attitude, self-efficacy, moral obligation, and religiosity have a favourable impact on intention to pay zakat [18]. As these components are favourable, an individual is more likely to be motivated to pay Zakat since they have both the personal capability and the moral, religious, and emotional desire to do so. These psychological and belief-based effects play a significant role in guaranteeing Zakat compliance because they lay the groundwork for the intention to act and the motivates them to pay zakat.

The pattern of income output subsequently experienced a remarkable transition as a result of the ongoing changes in the lifestyle of modern Muslim culture. Because it exaggerates the capacity of zakat institutions to assist the asnaf or those who are eligible for zakat, this situation makes zakat on income more significant.

METHODOLOGY

This research employs a survey methodology, utilizing online questionnaires to gather primary data. The researcher distributed the questionnaire via Google Forms to solicit feedback from respondents. The questionnaire comprises two parts: Part A focuses on Respondent Profile Information, while Part B delves into the knowledge, understanding and attitude towards Zakat on Earning among staff in Higher Education Institutions (HEIs) in Terengganu. The understanding, knowledge and attitude of respondents on this matter is assessed using nine items respctively. The reliability of the items is verified through Cronbach’s Alpha analysis, yielding a coefficient of 0.920. According to [19], a reliability coefficient closer to 1.0 indicates higher reliability, aligning with the Rowntree index which categorizes Cronbach’s Alpha level of 0.71 to 0.90 as a strong and highly reliable level [20]. Therefore, the items used to gauge the knowledge towards zakat on earning is good while high reliable for understanding and attitude. Subsequently, the obtained data is descriptively analyzed using SPSS 26. Mean and standard deviation serve as summary measures for the five-point Likert question on understanding, ranging from “strongly disagree” to “strongly agree.” These measures are categorized into three levels: low (mean score 1.00-2.49), medium (mean score 2.50-3.49), and high (mean score 3.50-5.00).

TABLE 1: CRONBACH’S ALPHA TABLE

ANALYSYS AND RESULTS

Respondent background

The survey includes 90 respondents who work in Terengganu’s Higher Education Institutions (HEIs), including academic and administrator staffs. According to Table 1, most of the respondents are female (82.2%), while the rest are males accounting for 17.8%. The age distribution shows that the majority (50%) of people are between the ages of 41 and 50. Meanwhile the smallest number of respondents (3.3%) falling between the ages of 21 and 30. Furthermore, 38.9% (35 individuals) are aged between 31 to 40 years, and 7.8% (7 individuals) are aged from 51 to 60 years. In terms of occupation, the majority (65.6%) are lecturers, with the remaining being administrative staff. Among the HEIs represented, 61.1% (55 respondents) are affiliated with UiTM institutions, 3.3% (3 respondents) with UMT, 6.7% (6 respondents) with UniSZA, while 24.4% (22 respondents) are associated with Politeknik, and 4.4% (4 respondents) from other HEIs in Terengganu. Regarding monthly income, 23.3% (21 individuals) earn between RM2000 to RM4000, 21.1% (19 individuals) receive RM4000 to RM6000 per month, 34.4% (31 individuals) fall within the RM6000 to RM8000 income bracket, 17.8% (16 individuals) earn RM8000 to RM10,000 monthly, and the smallest fraction, 3.3% (3 individuals), earn between RM10,000 to RM12,000 per month.

TABLE 2: BACKGROUND OF RESPONDENTS

The above table provides a breakdown of respondents’ demographics, including gender, age groups, occupation, institution affiliation, and monthly income range of the respondents.

Zakat Payment Method

TABLE 3: ZAKAT PAYMENT METHODS

Based on Table 3, it is evident that majority of respondents (87.8%) fulfill their obligation of paying zakat on earnings, while a minority (12.2%) of the respondents do not pay the zakat on earnings. The primary method utilized for zakat payment is through salary deduction, chosen by 67.85% of the respondents. Alternatively, 10.0% opt for payment at the zakat payment counter, 7.8% utilize internet banking, and 2.2% make direct payments to the asnaf. A mere 1.1% utilize Zakat applications to fulfill their zakat payment.

Knowledge of zakat on earnings

To gauge the knowledge level regarding zakat on earnings among Higher Education Institutions (HEIs) in Terengganu, a set of 9 questions was presented to the respondents. The findings indicate that majority of the respondents possess an excellent level of knowledge towards zakat. For instance, the mean value of 4.5778 with a standard deviation (s.d.) of 0.58015 demonstrates a high level of knowledge regarding zakat as an important part of Islamic worship. On the average, the respondent has strong believed that zakat is one of the pillars of Islam which need to be fulfill by each of Muslim with highest mean value of 4.7667 and standard deviation of 0.45097. Meanwhile, their level of knowledge toward wakalah only is moderate (mean = 3.533, sd= 1.18227).

TABLE 4: KNOWLEDGE OF ZAKAT EARNINGS

 The understanding of zakat on earnings

TABLE 5: UNDERSTANDING TOWARDS ZAKAT ON EARNINGS.

To assess the comprehension level regarding zakat on earnings among Higher Education Institutions (HEIs) in Terengganu, a set of 9 questions was presented to the respondents. The findings indicate that the majority of respondents possess a strong understanding of zakat payment regulations. For instance, the mean value of 4.36 with a standard deviation (s.d.) of 0.785 demonstrates a high level of understanding regarding zakat as an integral part of Islamic worship. Similarly, respondents demonstrated proficient knowledge of various aspects, such as the types of properties subject to zakat (mean value: 3.98, s.d.: 0.905), the nisab rate (mean value: 3.94, s.d.: 0.903), and the calculation process based on income (mean value: 3.81, s.d.: 0.946). Furthermore, respondents exhibited comprehension of the haul period in Islamic months for zakat payment (mean value: 3.81, s.d.: 0.993) and recognized the significance of calculating zakat payments according to the Islamic calendar (mean value: 3.72, s.d.: 1.122). Additionally, the mean value of 4.25 with s.d. (0.786) for understanding the importance of directing zakat payments to the state of employment indicates a robust understanding among respondents. Moreover, respondents acknowledged the necessity of calculating income zakat payments over a period of one year (mean value: 4.15, s.d.: 0.885), reaffirming a high level of comprehension. Table 5 presents the questions utilized to evaluate the understanding level of zakat on earnings among respondents.

Attitude towards zakat on earnings

Table 6 shows the questions used to investigate the respondents’ attitude towards zakat on earnings. All items received mean value more than 4 which shows that majority of the respondents have a positive attitude towards zakat on earnings. On average, they strongly agree that they are responsible to pay zakat on earnings (mean = 4.5667, sd= 0.76511), they sincerely pay zakat on earnings (mean = 4.5556, sd= 0.76601) and does not think paying zakat on earning is a burden (mean = 4.5222, sd = 0.82418). All of these elements show that the respondents have a positive attitude towards zakat on earnings.

TABLE 6: ATTITUDE TOWARDS ZAKAT ON EARNINGS.

Regression Analysis

TABLE 7: MODEL SUMMARY

Multiple Linear Regression was then analyzed to summarize the relationship between Knowledge, Understanding and Attitude with paying zakat on earnings. Table 7 shows the multiple regression analysis for this study. The result of the overall correlation shows that there is a weak (R=0.377) linear relationship between independent variables (Knowledge, Understanding and Attitude) with paying zakat on earnings. Coefficient of determination value, R2 indicates that 14.12% of the variation in paying zakat can be foreseen by Knowledge, Understanding and Attitude. In contrast, the remaining 85.88% comes from another factor that is not in the model.

TABLE 8: REGRESSION ANALYSIS TOWARDS PAYING ZAKAT ON EARNINGS.

Regression analysis proves that independent variable Knowledge (Beta=-0.292, p-value=0.011 < 0.05) and Understanding (Beta=0.288, p-value=0.002 < 0.01) are significant variables that contribute to paying zakat. Meanwhile, there is no significant relationship between Attitude with paying zakat.

DISCUSSION

Individuals who pay zakat on earnings possess a great level of knowledge and display a thorough comprehension of zakat on earnings payments, notwithstanding differences in income zakat legislation between states. These disparities stem from different evaluation procedures used by different legislatures, where individuals with a certain income threshold may be required to pay zakat under one state’s standards but exempt under another. This understanding is most likely due to the focus placed on the importance of zakat in their life, as explained by the Islamic Religious Council, as well as the humanitarian component of helping those in need. The study’s findings highlight legal and religious grounds as the key causes for zakat contributions, emphasizing zakat as an important form of worship in Islam.

While zakat is typically due upon the completion of a one-year haul period, many individuals opt to fulfill their obligations through various channels such as salary deductions, zakat payment counters, and internet banking. This inclination may be influenced by fatwas issued by the Islamic Religious Council concerning income zakat payments. The study’s findings underscore that knowledge and understanding as the primary motivations behind zakat payments, highlighting zakat as a pivotal form of worship in Islam. Majority of respondents had heard and understood the fatwa on zakat on earning, however they continued to pay zakat on earning due to various factors including income tax rebates and belief in an efficient and effective zakat distribution system, as well as wanting the benefits of paying zakat.

Zakat is an obligatory duty for all Muslims, regardless of their personal attitudes or readiness. Even if someone has a negative attitude towards paying zakat, the responsibility remains. Islam places a high value on carrying out religious tasks, and sentiments or personal feelings about the practice have no bearing on this requirement. While intention (niyyah) is important in Islamic activities, a poor attitude does not preclude someone from carrying out their commitments. Paying zakat may not bring joy or satisfaction, but the deed is still compulsory, and the correct desire to pay it as an act of worship is what important.

CONCLUSIONS

The results of this study found that the level of Knowledge and understanding of the staff in HEIs at Terengganu are high towards zakat on earnings. Since the respondents are from higher education institutions, the information about zakat can be easily accessed. Majority of the respondents are lecturers, indicating that they are highly educated. The respondents are also aware that zakat is one kind of worship to Allah and they pay zakat in order to clean their wealth. Although the findings of the study show that most of them understand and appreciate it, there are still a few who show a moderate and low level of understanding where they do not understand about zakat on earnings and result in not paying zakat. Therefore, the authorities need to provide more information related to zakat on earning to ensure the ownership of individual property is cleaner and increase justice in the distribution of wealth.

The study discovers that knowledge and comprehension of zakat on earnings significantly influence the zakat on earnings payment, while attitude does not have a significant impact. Significance interpretation towards zakat on earnings and the norms that govern it is usually more important than attitude in guaranteeing its proper payment. A person who knows zakat and its purpose can perform it regardless of their attitude, whereas a person with a negative attitude but insufficient knowledge may be unable to carry out the responsibility. In summation, knowledge and comprehension have a direct impact on zakat payment and calculation, whereas attitude has no effect on the obligation. Even if someone is unwilling or dislikes paying zakat, it is still their responsibility because it is an act of worship stipulated by Islamic law where zakat on earnings is an Ibadah that rewards many people. Nonetheless, the debate over zakat on earnings requires greater clarification, particularly on critical issues such as the nisab threshold and the calculating process. This will assist zakat payers in developing a more in-depth grasp of their commitments, rather than just following the established fatwa without fully realizing the repercussions. For further research, it is recommended that the sample of the respondents is increased and investigate whether there are any differences between gender in term of paying zakat on earnings.

ACKNOWLEDGMENT

The authors would like to express their sincere gratitude to all Semester 1 students of UiTM Cawangan Terengganu enrolled in the Business Mathematics course for their valuable support and cooperation during the data collection process. Appreciation is also extended to UiTM Cawangan Terengganu for providing the opportunity and moral support that contributed to the successful publication of this paper.

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