How Do I Calculate Zakat on My RRSP and TFSA?

Most scholars say zakat is due on the full value of your TFSA. For the RRSP, scholars differ: some use the full balance, and many allow you to deduct the tax you would owe if you withdrew it.

The TFSA is straightforward because you can withdraw it anytime with no tax. The RRSP is different because part of it effectively belongs to the government as future tax. Example: on a $100,000 RRSP where withdrawing would cost about $30,000 in tax, the net approach calculates 2.5% zakat on $70,000, which is $1,750, instead of $2,500 on the full balance. Ask your imam which method to follow. I can give you the exact account values and estimated tax for your zakat date.

Want to know if your own accounts pass? Book your complimentary review with me.