Zakat

Zakah on wealth is based on the value of all of one's total possessions. It is an amount of 2.5% one ones total savings and wealth above a minimum amount known as nisab, It is a religious and a social obligation (fardh) enjoined upon every believer.

Zakah’s mention is seen placed together with the Salah (prayer) in verses of the Qur’an and the sayings of Prophet Muhammad صلى الله عليه وسلم

Through this is cultivated a sense of responsibility, empathy, cooperation and kindness. Through this the ties of brotherhood are strengthened among the rich and poor.

One only has to pay Zakah in each respective category if he owns that minimum amount

One is able to also purify himself and the one who pays zakah is also blessed in his wealth.

And whatsoever you spend of anything (in Allah’s cause) He will replace it. And He is the best of the providers’ Qur’an 34:39

On the day of judgement, one would be punished for hoarding what is called Kanz, any wealth, the Zakat of which has not been paid.

In an authentic Hadith the Prophet صلى الله عليه وسلم said

“any owner of gold or silver who does not pay that you will have plates of fire prepared for him on the day of judgement. They will be heated in the hellfire, and then his side, his forehead, and his back will be ironed (by those plates). Each time they become cool again, the process is repeated on him in a day whose measure is equal to 50,000 years, until finally judgements will have been passed among Allah’s creatures, and each one sees his course either to Paradise or to hell.

The prophet صلى الله عليه وسلم also said,

“Whomsoever Allah gives wealth to but doesn't pay Zakah for it , a large snake with two black dots above its eyes will take form for him and squeeze him on the day of judgement. Then the snake will take him by the corners of his mouth and say I am your wealth I am your Kanz”

Then he recited this verse

“and let's not those who covetously withhold of that which Allah has bestowed on them of his bounty (wealth) Think that it is good for them. Nay, it will be worse for them; the things which they covetously withheld shall be tied to the next like a collar on the day of judgement” —Qur’an.