Who Must Pay Zakat in the Case of a Sole Trader?

A sole trader is an individual who independently owns and operates a business without forming a company or partnership. 

This business structure means:

• The owner is solely responsible for all profits and losses.
• All assets and liabilities belong directly to the individual.
• Employees can be hired without changing the business structure.

Zakat's Responsibility for a Sole Trader

Since there is no legal distinction between the individual and the business, the owner is fully responsible for paying Zakat. 

The key considerations include:

• Zakatable Assets: The trader must calculate Zakat on all eligible assets, including:
  
  
• Cash in hand and bank accounts
• Business stock and inventory
• Accounts receivable (money owed by customers)
• Liabilities Deduction: Before calculating Zakat, immediate liabilities, such as debts payable within the Zakat year, can be deducted from the total assets.
  
  
• Calculation & Payment:
  
  
• Zakat is calculated at 2.5% of the net Zakatable assets.
• It must be paid after a full lunar year has passed and the Nisab (minimum threshold) has been met.

As the sole decision-maker and beneficiary, the trader is responsible for ensuring that Zakat is properly calculated and given. 

Many choose to fulfill their Zakat obligations by supporting causes focused on orphan care, ensuring that their contributions create a lasting impact. Organizations like Pakistan Sweet Home lead the way by transforming lives through structured care, compassion, and empowerment.

And Allah knows best.

Other Zakat Questions You May Have

• Is Zakat Required on Unpaid Mahr from My Nikah?
• Is Zakat Required on Money Owed to Me?
• Is Zakat Obligatory for Children?
• How Long Should Mutual Funds or Shares be Held for Zakat?
• How to Settle the Full Outstanding Zakat Amount?
• Is a Full Year Necessary for Zakat to Become Important?