Determinants of employee compliance behavior on zakat on savings

The role of zakat in improving the well-being of the Muslim society is undisputable. Despite its importance, zakat collection is still an issue in Malaysia. It is associated with the low level of compliance behavior among individual Muslims. In addition, most previous studies only focused on the zakat compliance behavior on employment income and business. One form of zakat that has received a lack of scholarly attention is zakat on savings. Due to this gap, this study investigated the determinants of the Muslim employee compliance behavior on zakat savings in Kedah. This study applied the Fischer model as the underlying framework in examining the zakat compliance behavior on savings. Several factors like individual, social, institutional, and economic were included and anticipated to influence zakat compliance behavior on savings in the framework. This study had three key objectives. The first objective was to determine the factors that influence zakat compliance behavior on savings. It also aimed at determining the factors that influence attitude toward zakat on savings. Finally, this study investigated the mediating effect of attitude between the exogenous variables (organizational religiosity, non-organizational religiosity, knowledge, reference group, perceived corporate credibility, tax rebate, and level of income) and the endogenous variable of zakat compliance behavior on savings. Data were collected from 280 public and private sector employees using self-administered questionnaires. The structural equation modeling was applied to test the research hypotheses. The findings revealed several factors that influence zakat compliance behavior on savings as well as attitude toward zakat compliance. The result also indicated that attitude toward zakat compliance mediated the relationship between reference group and perceived corporate credibility on zakat compliance behavior on savings. The implication for theory and zakat institutions is also discussed.