“Khums” literally means “one-fifth” (or 20%). In Islamic legal terminology, it means “one-fifth of certain items which a person acquires as wealth, which must be paid as an Islamic tax”.
The Qur’an mentions this tax in Surah Anfal verse number 41:
“Know that whatever thing you acquire as profit, a fifth of it is for Allah, for the Messenger, and for the near relatives, and the orphans, the needy, and the [stranded] traveller.”
In this verse, the word “ghanimtum” has been used, which has been translated as “you acquire as profit”, meaning certain items that a person acquires as wealth.
What are these certain items?
According to the Shia faith, seven things are eligible for khums:
- Surplus income, which includes profit from business earnings, wages/salary, and dividend payments
- Legitimate (halal) wealth that has become mixed with illegitimate (haram) wealth
- Precious stones obtained from the sea by diving
- Treasures found
- The land which a dhimmi kafir buys from a Muslim
- The spoils of war
For the majority of us today, the one that applies the most is “profit from earnings”.
Why do we pay it?
Khums is one of the pillars of Islam. It was prescribed by Allah and practiced during the life of the Prophet (saw) and the Imams (af).
As such, khums is considered an act of worship and must be given with the right intention, i.e. for attaining proximity to Allah (qurbatan ilallah).
If khums is practiced correctly, then the earnings of the person are purified, becoming Halal (Islamiclly lawful). On the other hand, if the khums is neglected or ignored, the earnings of the person will be regarded as ‘spiritually impurified’ & can invite Devine Retribution in the Here and Next World.
When to pay it?
You have to pay khums on your profit once you begin earning an income. The payment becomes obligatory (wajib) after the passing of one year.
You can follow either the Hijri or Georgian calendar for determining the end of the year, and the payment can even be aligned to the fiscal calendar to make it easier for business owners.
Your khums is the right of the Imam (af) and Sadat (i.e. sayyids), and it must be given in full and on time. If payment is delayed then it is haram to use any of the remaining amount of the remaining profits earned that fiscal year.
You may also need to consider previous khums payments if you missed them, or if you acquired some unexpected income during the year.
Who to pay?
You must pay your khums to a Marja Taqlid – i.e. a high religious authority who can be followed in matters of Islamic law – like His Eminence al-Sayyid Ali al-Sistani (may God protect the marAij’).
Alternatively, it can be paid to an individual or organisation that has been given permission (ijaza) to collect khums on behalf of the Marja.
The World Federation is proud to have permission (ijaza) from His Eminence al-Sayyid Ali al-Sistani (may God protect him) to collect khums payments on his behalf and to disperse the Sehme Imam portion on religious projects and activities.
When you have fulfilled your khums obligation with The World Federation, you will receive a receipt from the office of His Eminence.
Where does it go?
Half of the khums belongs to poor Sadat and the remaining half is called the portion of the Imam (af). During the age of occultaion, the portion of the Imam (af) is spent by Marja’s on cases they infer as expedient based on the life and practice of the Ahl al-Bayt (as).
In accordance with the Shia faith, the Sehme Sadat portion of khums is distributed to the descendants of the great grandfather of the Prophet (saw) who are in need, orphans, or are stranded travellers.
The World Federation sends the Sehme Sadat portion of khums directly to the office of His Eminence al-Sayyid Ali al-Sistani (may God protect him).
As for the Sehme Imam portion, The World Federation has been given permission to administer it directly to propagate the beautiful religion of Islam across the world. This includes some of the work that is taking place in the Madrasah Centre of Excellence, Tableegh programmes, and many other religious projects.
How is it calculated?
The most common item on which khums is payable is surplus income.
Income relates to whatever is earned from business, wages/salary, dividend income, or by other means recognised by the Shariah.
According to His Eminence al-Sayyid Ali al-Sistani (may God protect him), khums is payable on gifts and wealth left in a will, but it is not payable on dowries or inheritance, except when one inherits unexpectedly.
Savings refers to whatever remains after deducting the annual expenses of oneself and one’s dependents. In the case of a business person, it equals whatever remains after deducting the annual business expenses, including the person’s salary. All new, unused household items, or groceries that have not been used by the end of the khums year, must also be counted as savings.
The expenses which are to be deducted are of two types: personal and commercial.
Personal expenses are exempt from khums only if they are in line with the person’s social status (and not extravagant or haram expenses). These expenses include:
- Food, transportation, household items, medical expenses etc.
- Car, medical or protection insurance, travel expenses including hajj and ziyarat, vacation etc.
- Financial obligations to help close poor relatives or recommended charities etc.
Commercial expenses include:
- Business expenditure including wages, rent, insurance, and taxes.
Depreciation in a commodity or loss of a commodity.