As I grapple with the effects of high inflation on our budget, I was wondering, can we take inflation into consideration when calculating how much we should give to maaser (10% of one's net earnings that goes to charity)?

Do We Pay at All?

With inflation rising and showing few signs of abatement, many of us are struggling to cover the bills. If this is the case, speak to your rabbi since you may be able to count certain things toward your maaser, or even exempt from paying maaser altogether in certain situations.

That said, let us focus on how one would calculate maaser from gains that may have been somewhat offset by inflation by first drawing a distinction.

As we explained in Does Judaism Consider Bitcoin to Be Money? the laws governing currency and commodities are different.

In the context of ribit (the prohibition on charging or paying interest to a fellow Jew), as far as currency is concerned, even if the worth of a certain currency rose, the amount borrowed is the amount to be paid. So if you borrow $100, you pay back $100, even if the $100 you pay back is “worth” more than the $100 you borrowed.1

The same would hold true for making a charitable pledge (or writing a contract) for a specific amount of money. The amount pledged would not change based on inflation or deflation.

Conversely, if you borrow $100 worth of apples (a commodity), and the price of apples rises, you only return as many apples as $100 can purchase at the time of return.

Calculating Maaser With Inflation

Maaser is calculated based on the real, not nominal, profit.

Thus, if one bought a house for $100,000 and then 10 years later sold it for $200,000, the nominal profit would be $100,000, and $10,000 would be owed to maaser.

However, if one factors in that over that period of time the cumulative inflation rate was 20%, the real profit was only $80,000, and $8,000 is thus owed to maaser.2

(Additionally, one may also deduct certain expenses such as capital improvements and certain taxes, which could further lower what is considered profit.3 )

What Is “Inflation”?

What happens if the cost of bread goes up but the cost of Lexuses has gone down? Was there inflation or deflation? Rabbi Moshe Feinstein, one of the leading halachic authorities in the last century, held that we calculate inflation based on the deferential in the cost of food and basic living necessities, but not luxury items or home prices. Thus, a cost of living index would be more accurate than the Consumer Price Index, which includes prices for luxury items.4

Importance of Maaser

Although there is some leeway when it comes to calculating maaser, especially when finances are tight, we need to keep in mind the importance of separating maaser and the blessings it brings to our lives.

Separating maaser is the only mitzvah recorded in the Torah as having been kept by each of our forefathers.5

Additionally, on the verse in Deuteronomy “A tithe shall you tithe (te’aser),”6 the Talmud7 gives a homiletical explanation: “Take a tithe (aser) so that you will become wealthy (titasher).”

Thus, especially in tight times, it is important to be extra careful with separating maaser. In the merit of this mitzvah, may we be blessed with an abundance of livelihood!