(1.)An obligatory Islamic tax that is 2.5% of the annual (yearly) sum of all the money a Muslim owns. It goes to charity.
(2.)A term used in Islamic finance to refer to the obligation that an individual has to donate a certain proportion of wealth each year to charitable causes. Zakat is a mandatory process for Muslims in order to physically and spiritually purify their yearly earnings that are over and above what is required to provide the essential needs of a person or family.
Source 1 Islamic Dictionary
Source 2 Investopedia