Zakat is the amount of money that every adult, mentally stable, free, and financially able Muslim, male and female, has to pay to support specific categories of people. This category of people is defined in surah at-Taubah (9) verse 60: “The alms are only for the poor and the needy, and those who collect them, and those whose hearts are to be reconciled, and to free the captives and the debtors, and for the cause of Allah, and (for) the wayfarers; a duty imposed by Allah. Allah is knower, Wise.” (The Holy Qur’an 9:60).
The obligatory nature of Zakat is firmly established in the Qur’an, the Sunnah (or hadith), and the consensus of the companions and the Muslim scholars. Allah states in Surah at-Taubah verses 34-35: “O ye who believe! there are indeed many among the priests and anchorites, who in Falsehood devour the substance of men and hinder (them) from the way of Allah”.
Zakat is obligatory when a certain amount of money, called the nisab is reached or exceeded. Zakat is not obligatory if the amount owned is less than this nisab.
Zakat is a compulsory act of worship that requires Muslims, at or above a certain wealth threshold, to donate a portion of that wealth, typically 2.5%, to those who are eligible.
This threshold is called the Nisab (sometimes also spelled niṣāb).