Every business entity are obligated to pay zakat wether profit has been earned or not. It is compulsory to them to pay zakat aslong as the business have positive working capital. Beside that, only surpluses asset are subject to zakat . This means that if the sum of the zakatable assets owned by the business is below the nisab at the time zakat falls due (haul), the businesses do not have to pay zakat.
Awang and Abdul Rahman (2003) in their case study at Pusat Zakat Selangor (PZS), mentioned there are two approaches adapted by PZS namely Growth Model (Urfiyyah) and Working Capital Model (Syarr‟iyyah).
Growth model method
This method consider the growth of the capital within the business entity. It ‘s accounted any source of financial funding that use to operating business such as private loan and owner capital and some adjustment . To be simplified, this method can be defined by the capital plus business profit. This method are compute by using this formula
Owner equity + long Term Liability-fixed Asset- noncurrent asset +/- adjustment= net asset due to zakat Working capital method
This method using the position of the current business asset after being subtracted by current business liabilities and after adjustment being made. This approach is known as Working Capital considers current assets and deducts current liabilities and the necessary adjustments by adding or deducting clarified items by this equation (Hamat,2009).
These method are compute by using this formula
Current asset-current liabilities+/- adjustment = net asset due to zakat Most zakat collection centres in Malaysia have been adapting this approach in measuring zakat including those from Terengganu, Kelantan,...