KWSP Money is money from the income of a person as a result of his employment stored in the savings account of the employee as subjected to the KWSP Act. KWSP is subject to zakat because the concept is the same as savings, but the difference in savings in the KWSP can not be arbitrarily withdrawn as a normal savings account.
This money can only be deducted partly by a contributor when it reaches a certain age during his or her term of service or takes it as a whole when it has reached the pension or retirement age. In addition to age-based production, it may also be issued upon qualifying under the various KWSP Withdrawal Schemes.
Obligatory of Zakat
وَٱلَّذِينَ يَكْنِزُونَ ٱلذَّهَبَ وَٱلْفِضَّةَ وَلَا يُنفِقُونَهَا فِى سَبِيلِ ٱللَّهِ فَبَشِّرْهُم بِعَذَابٍ أَلِيمٍۢ ٣٤
يَوْمَ يُحْمَىٰ عَلَيْهَا فِى نَارِ جَهَنَّمَ فَتُكْوَىٰ بِهَا جِبَاهُهُمْ وَجُنُوبُهُمْ وَظُهُورُهُمْ ۖ هَٰذَا مَا كَنَزْتُمْ لِأَنفُسِكُمْ فَذُوقُوا۟ مَا كُنتُمْ تَكْنِزُونَ ٣٥
“O you who have believed, indeed many of the scholars and the monks devour the wealth of people unjustly and avert from the way of Allah. And those who hoard gold and silver and spend it not in the way of Allah – give them tidings of a painful punishment. The Day when it will be heated in the fire of Hell and seared therewith will be their forehead, their flanks, and their backs, [it will be said], “This is what you hoarded for yourselves, so taste what you used to hoard.”
(Surah At-Taubah : Verse 34-35)
“Apabila kamu mempunyai 200 dirham dan telah cukup haul (genap setahun) diwajibkan zakatnya 5 dirham. dan tidak diwajibkan mengeluarkan zakat (emas) kecuali kamu mempunyai 20 dinar (salah satu matawang zaman dahulu yang digunakan di negara Arab). Apabila kamu mempunyai 20 dinar dan telah cukup haulnya, diwajibkan zakatnya setengah dinar. Demikian juga kadarnya jika nilainya bertambah dan tidak diwajibkan zakat bagi sesuatu harta kecuali genap setahun.”
(Hadis riwayat Abu Daud)
The Kumpulan Wang Simpanan Pekerja (KWSP) Zakat Fatwa
FATWA UNDER SECTION 47, Pursuant to section 47 of the Administration of the Religion of Islam (State of Selangor) Enactment 2003 [En. 1/2003], the Fatwa Committee for the State of Selangor, by His Royal Highness the Sultan provides the fatwa specified in the Schedule and published pursuant to subsection 48 (6) of the Enactment.
Selangor State Zakat Collection Management Fatwa 2013 (after amendment) About the Cleaning Issues تَصْفِيَّة (Tasfiyyah)
Benefits of KWSP Account Investment
FATWA UNDER SECTION 47 The total amount of KWSP withdrawals required is as a whole (principal + dividend + bonus) WITHOUT need to be separated (no need for cleaning) dividend returns or non-compliant bonuses. This is because the depositors are required to contribute by the government without any choice (ijbari). The depositors are also not fit to be charged on any government action beyond their control.
Surah Fatir : Verse 18 and Surah Al-An’aam : Verse 164
The fiqh method of تَصَرُّفُ الْأِمَاِم عَلَى الرَّاعِيَّةِ مَنُوْطٌ بِالْمَصْلَحَةِ“the government’s action on the people must be followed by the benefits” to allow the management of people’s money by the government in accordance with the KWSP Act 1991.
But if later, the KWSP already provides a shariah-compliant investment option, then the depositors who did not choose the investment should purify / purify the illegal / syubhah part to Baitulmal.
Type of KWSP Zakat
There are two views on zakat for KWSP.
- Before attaining 55 years of age (imperfect ownership)
2.5% of KWSP’s total withdrawal is the sum of the amount of zakat. The amount of withdrawal does not matter if it reaches nisab. If the amount of KWSP withdrawals under nisab, should be mixed with other income
- Upon reaching 55 years of age (perfect ownership)
2.5% of the total KWSP money is paid as deposit zakat method. Therefore, there is no deduction for KWSP contribution to the assessment of income tax for those who are still working and making KWSP contributions
Nisab Year 2012: RM13 000.00
Mr Ali, 35, issued KWSP issue amounting to RM20,000 from the Education Withdrawal Scheme.
Total zakat charged: RM20,000 X 2.5% = RM500.00