Zakat is regarded to as one of the Five Pillars of Islam and is just as important as daily prayers, fasting and hajj.
Zakat is a form of alms-giving, or an obligatory religious tax, which in Quranic ranking is next to prayer in importance.
Each year, after bills and taxes, Muslims are expected contribute 2.5% or 1/40th of the wealth that they have saved up that year to charity. The money is then collected by a religious institution (or the state, depending on where you live) and is redistributed among the less fortunate and the needy.
To give alms, you need to fit within a certain criteria that brands you “well off” enough to give up money. It is not expected from poor or limited income individuals.
But there is another, smaller Zakat that is expected from almost everyone – Zakat al Fitr.
At the end of the holy month of Ramadan each year, both males and females, young and old, given that they participated in the yearly fast, give a small amount to charity to make sure that every Muslim gets the chance to celebrate Eid.
While regular Zakat is based one’s income, Zakat al Fitr is a fixed rate at the price of around 3 kg of rice or wheat at local cost.