Praise be to Allah.
Zakaah in Arabic means growth, blessing and purification.
See Lisaan al-‘Arab, 14/358;, 2/399
Sadaqah comes from the word sidq (sincerity), i.e. it is a sign of sincerity of faith on the part of the person who gives it.
See Fath al-Qadeer, 2/399
With regard to the shar’i definition:
Zakaah means worshipping Allaah by giving that which He has enjoined of different kinds of zakaah to those who are entitled to them, according to the guidelines prescribed in sharee’ah.
Sadaqah means worshipping Allaah by giving money without that being made obligatory in sharee’ah. The word sadaqah is sometimes used to refer to obligatory zakaah.
With regard to the difference between zakaah and sadaqah, it is as follows:
1 – Zakaah is enjoined in Islam on specific things, which are: gold, silver, crops, fruits, trade goods and an’aam livestock, i.e., camels, cattle and sheep.
With regard to sadaqah, it is not obligatory on any kind of wealth, rather it is what a person can give, without any specific limits or guidelines.
2 – Zakaah is subject to the conditions that one full Hijri have passed since acquiring the wealth, and that the wealth meet the minimum threshold (nisaab), and it is a specific portion of wealth.
Sadaqah is not subject to any conditions, and it may be given at any time, in any amount.
3 – Allaah has enjoined that zakaah be given to certain types of people, and it is not permissible to give it to anyone else. They are the people mentioned in the verse (interpretation of the meaning):
“As-Sadaqaat (here it means Zakaah) are only for the Fuqaraa’ (poor), and Al‑Masaakeen (the poor) and those employed to collect (the funds); and to attract the hearts of those who have been inclined (towards Islam); and to free the captives; and for those in debt; and for Allaah’s Cause (i.e. for Mujaahidoon — those fighting in a holy battle), and for the wayfarer (a traveller who is cut off from everything); a duty imposed by Allaah. And Allaah is All-Knower, All-Wise”
With regard to sadaqah, it may be given to those mentioned in the verse on zakaah and to others.
4 – Whoever dies and owes zakaah, his heirs must pay it from his wealth, and that takes precedence over the will (wasiyah) and inheritance.
As for sadaqah, there are no such obligations with regard to it.
5 – The one who withholds zakaah is to be punished, as it says in the hadeeth narrated by Muslim in his Saheeh (987) from Abu Hurayrah (may Allaah be pleased with him) who said: The Messenger of Allaah (peace and blessings of Allaah be upon him) said: “There is no owner of treasure who does not pay his zakaah, but it will be heated in the Fire of Hell and made into plates with which his sides and forehead will be branded until Allaah passes judgement between His slaves on a Day the length of which will be like fifty thousand years, then he see shown his path and whether it leads to Paradise or to Hell. And there is no owner of camels who does not pay zakaah on them, but a soft sandy plain will be prepared for him and they will be made to step on him. Every time the last of them has gone the first of them will return, until Allaah passes judgement between His slaves on a Day the length of which will be like fifty thousand years, then he will see his path and whether it leads to Paradise or to Hell. And there is no owner of sheep who does not pay zakaah on them but a soft sandy plain will be prepared for him, and he will find none of them missing, with twisted horns or without horns or with broken horns, and they will be made to gore him with their horns and trample him with their hooves. Every time the last of them has gone the first of them will return, until Allaah passes judgement between His slaves on a Day the length of which will be like fifty thousand years, then he will see his path and whether it leads to Paradise or to Hell…”
With regard to sadaqah, the one who does not pay it will not be punished.
6 – According to the four schools of law, it is not permissible to give zakaah to one’s ascendants or descendents. Ascendants include one’s mother, father, grandfathers and grandmothers; descendents include one's children and their children.
Sadaqah may be given to one's ascendants and descendants.
7 – It is not permissible to give zakaah to one who is rich or who is strong and able to earn a living.
It was narrated that ‘Ubayd-Allaah ibn ‘Adiyy said: Two men told me that they came to the Prophet (peace and blessings of Allaah be upon him) during the Farewell Pilgrimage when he was distributing the zakaah and asked him for some of it. He looked them up and down, and saw that they were strong and able-bodied. He said, “If you wish, I will give you some, but those who are rich or strong and able to earn have no share of it.”
Narrated by Abu Dawood, 1633; al-Nasaa’i, 2598; classed as saheeh by Imam Ahmad and others.
See Talkhees al-Habeer, 3/108
Sadaqah may be given to those who are rich and those who are strong and able to earn.
8 – In the case of zakaah, it is better for it to be taken from the rich of a land and given to their poor. Many scholars are of the view that it is not permissible to send it to another country unless that serves an interest.
But charity may be spent on those who are near and those who are far.
9 – It is not permissible to give zakaah to kuffaar and mushrikeen.
Sadaqah may be given to kuffaar and mushrikeen.
Allaah says (interpretation of the meaning):
“And they give food, in spite of their love for it (or for the love of Him), to the Miskeen(the poor), the orphan, and the captive”
Al-Qurtubi said: In dar al-Islam (the Muslim lands), a captive could only be a mushrik.
10 – It is not permissible for a Muslim to give zakaah to his wife. Ibn al-Mundhir narrated that there was scholarly consensus on this point.
But sadaqah may be given to one’s wife.
These are some of the differences between zakaah and sadaqah.
The word sadaqah may be applied to all kinds of good deeds. Al-Bukhaari (may Allaah have mercy on him) said in his Saheeh: “Chapter: every good deed is a charity” then he narrated from Jaabir ibn ‘Abd-Allaah (may Allaah be pleased with him) that the Prophet (peace and blessings of Allaah be upon him) said: “Every good deed is a charity.”
Ibn Battaal said: This hadeeth indicates that every good thing that a person does or says is recorded for him as an act of charity.
Al-Nawawi said: The Prophet’s words “Every good deed is a charity” means that it is like charity in reward.
And Allaah knows best.