Zakah on RESP and Education Savings (Canada) (2026)

An RESP is one of the more common accounts Canadian Muslim parents ask about, and the confusion usually comes from treating it like a TFSA. It isn't one. The governing question for zakah is always the same: do you have complete ownership (al-milk al-tamm) of this wealth right now, without restriction or penalty? For an RESP, the answer while the money sits in the plan is no.

While the RESP Is Restricted

An RESP is government-restricted for education spending. You cannot pull funds out for general use without giving up grants and facing penalties. That restriction means the same-year, annual zakah obligation does not apply. No zakah is due on an RESP balance while it remains locked into its intended purpose.

When the Money Comes Out

The obligation, when it arises, depends on where the withdrawal goes:

• Paid out for qualified education expenses: the money is spent on the need almost immediately, so there is typically nothing left over to count at the next zakah date.
• Withdrawn for personal, non-education use: this is a real withdrawal of accessible wealth. Pay 2.5% on the net amount received.

Whose Zakah Is It?

This is the detail most parents miss. Once RESP funds are paid out to the student — as an Educational Assistance Payment — that money belongs to the student, not the parent. If the amount that ends up unspent and sitting in the student's own account reaches nisab, it's the student's zakah obligation to assess, not the parent's. A parent tracking their own zakah should not be including RESP funds that have already been disbursed to an adult child.

FAQ

Do I pay zakah on my RESP contributions every year while my kids are young?

No. The restriction on the account is what matters, not who contributed the money. As long as it's locked into the RESP structure, no annual zakah applies.

What if I collapse the RESP and take an Accumulated Income Payment?

That's a personal withdrawal outside the education-spending category. Treat the net amount you actually receive, after tax and any penalty, as a cash asset and pay 2.5% on it.

Calculate your full zakah picture at https://simplezakatguide.com/calculator.