I was working in a startup company and was offered 20 thousand stock options. I bought 10 thousand at a price of 1 dollar per option. After two years the valuation of the company increased and the option price became 3 dollars. Those options can not be sold as they are not real stocks. Then, the company was acquired and the value of my 10 thousand options became 100 thousand dollars in stocks. I can only sell those stocks after a waiting period of 6 months. I have the following questions: 1. Do I owe any Zakat for the two years the company was private and option price increased? how much? 2. How do I calculate the zakat for the stocks I have now? 3. Do I calculate the zakat from the time of acquisition or after the waiting period or what?

Alhamdu Lillah,

The sale nature of buying these so called “stocks” is not clear for 4 reasons:

1- Offering these stocks is a part of the employees’ non-cash compensation.

2- They are offered for a very symbolic and nominal price.

3- They do not represent a real asset, commodity, service, or even a share in the company.

4- Employees’ ownership of these stocks is very restricted, as you indicated in your question.

However, the above does not mean that if you did not buy these stocks they are not subject to Zakah; they are, simply because they are a kind of wealth or asset you have, regardless of the way you owned them.

That being said, since you do speculate in these stocks, you keep them in your possession for a long period of time; the Zakah is not due on the market value of these stocks, but only on the profit/revenue those stocks make for you (if there is any). The Zakah is due on an annual basis since the time you bought them.

To compute the due Zakah, you need to add the profit you gained from them to the money pool you have (cash in hand, money in checking account, other monetary assets,etc) and pay 2.5% as a Zakah rate.

In case of not having any profit (which is possible due to the fact that these are not real stocks), or otherwise, not having any access to them or being unable to sell them, then their market value is not subject to Zakah until you sell them and got the money, or at least when you are able to sell them. From that time on, you need to pay Zakah on them on an annual basis accordingly.