Zakat deduction from employer tuition assistance


Asa Mutfi Sahab, this relates to the zakat handling of claw-back tuition provisions that employers provide. Many employers provide tuition assistance for employees studying for more advanced degrees. These loans need to be paid back to the employer if the employee leaves the organization. However, after a certain amount of time (that is contractually agreed), the employer forgives that loan. So, in my case, I need to pay a certain amount if I leave now and for every 6 months I stay with the current employer, they will forgive me 25% of the loan. I.e if I work another 2 years with them, this loan will be forgiven. In my specific case, I cannot guarantee whether I will stay with my employer for the next 2 years or not so may or may not ending up paying this loan back. Can i deduct this loan from zakat calculations? Jzk

بِسْمِ اللهِ الرَّحْمنِ الرَّحِيْم

In the name of Allah, the Most Gracious, the Most Merciful


Wa Alaykum Assalam,

Claw-back tuition loans should be handled as a normal loan as far as zakat is considered. The reason for this is the fact that the loan is due now. The employer forgiving the loan based on how long you work at the job is a secondary issue. The amount that you will pay on the loan in the year should be deducted from the total assets. The resulting number should be used to give zakat upon.

Please see the following link for more details:

Only Allah knows best

Written by Maulana Shadman Ahmed

Concurred by Moulana Mohammad Ahsan Osmani

Darul Ifta Texas

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