Zakat is one of the five pillars of Islam: an obligatory annual payment on wealth that is above a minimum threshold, given to specified categories of people in need. For most Muslims the calculation itself is not difficult; the questions are about which assets count, which threshold to use and when the year starts. This guide explains the mainstream rules in simple terms. Our zakat calculator adds up your assets and liabilities for you.
This guide summarises widely held positions for information only. Schools of thought differ on details such as jewellery, pensions and debts. For your own situation, consult a qualified scholar or an established zakat organisation in your country (for example the National Zakat Foundation in the UK or a recognised mosque or Islamic council).
The three conditions
Zakat on wealth is due when:
- Ownership: you fully own the wealth and have access to it.
- Nisab: your total zakatable wealth, after deducting immediate debts, is at or above the nisab threshold.
- Hawl: that wealth has been held above the nisab for one full lunar (Hijri) year, about 354 days.
The rate is 2.5% (one-fortieth) of the total zakatable wealth on your zakat date, not just the amount above the nisab.
The nisab threshold
The nisab is defined by weight of gold or silver, based on hadith:
| Standard | Weight | Value |
|---|---|---|
| Gold | 85 g (20 mithqal) | Changes with the gold price |
| Silver | 595 g (200 dirhams) | Changes with the silver price |
Because silver is much cheaper per gram, the silver nisab is many times lower than the gold nisab. For example, with hypothetical prices of £90 per gram of gold and £1 per gram of silver:
- Gold nisab: 85 × 90 = £7,650
- Silver nisab: 595 × 1 = £595
Many charities recommend the silver nisab for cash and mixed assets because it benefits more recipients; others use the gold nisab. For wealth held entirely in gold, the gold nisab applies. Check today’s metal prices on your zakat date, since they change daily.
Which assets are zakatable?
Usually included:
- Cash at home and in bank accounts (current and savings)
- Gold and silver (bullion, coins; jewellery according to many scholars)
- Money owed to you that you expect to be repaid
- Business inventory, at its current sale value
- Shares and funds: either the full market value (if trading) or your share of the company’s zakatable assets (if holding long term), according to different methods
- Cryptocurrency held as an investment, according to most contemporary bodies
- Rental income that you still hold on your zakat date (not the rental property itself)
Usually excluded:
- Your main home, car, furniture, clothes and personal items
- Tools and equipment used in your business (fixed assets)
- Property bought for personal use or to rent out (the property itself)
Pensions are an area of difference: some scholars apply zakat only to the accessible part, others not until it is withdrawn.
Deducting debts
Most bodies allow you to deduct debts due now or within the coming year, such as bills, rent owed and the next 12 months of loan or mortgage instalments (not the whole remaining mortgage). Long-term debts that are not immediately payable are usually not deducted in full.
Worked example
Aisha’s zakat date is 1 Ramadan. On that date she has:
| Item | Amount |
|---|---|
| Current and savings accounts | £14,500 |
| Cash at home | £500 |
| Gold jewellery (20 g × £90/g) | £1,800 |
| Shares in an index fund (market value) | £6,000 |
| Money lent to a friend, expected back | £1,000 |
| Total assets | £23,800 |
| Credit card bill due this month | −£800 |
| Next 12 months of a car loan | −£3,000 |
| Zakatable wealth | £20,000 |
£20,000 is above both the gold (£7,650) and silver (£595) nisab examples, and she has been above the nisab for a full lunar year.
Zakat = £20,000 × 2.5% = £500.
Quick check: dividing by 40 gives the same answer (20,000 ÷ 40 = 500).
Choosing your zakat date
- Your hawl starts on the day your wealth first reached the nisab. Many people find it easier to pick a fixed memorable Hijri date, often in Ramadan, and calculate every year on that date.
- Use the Hijri year, which is about 11 days shorter than the Gregorian year. If you calculate on a Gregorian date, some scholars suggest using 2.577% to compensate for the longer solar year.
- Our Hijri calendar guide explains the lunar months.
Who receives zakat
The Qur’an (9:60) lists eight categories, including the poor, the needy, those in debt and travellers in need. Zakat is not given to one’s own parents, children or spouse, whom one is already obliged to support. Many people pay through registered charities that distribute it under these rules; in some countries, such as Saudi Arabia, zakat on businesses is collected by a state authority.
Zakat al-fitr (fitrana)
Separate from zakat on wealth, zakat al-fitr is a small charity paid for each member of the household before the Eid al-Fitr prayer at the end of Ramadan. Traditionally it is a measure (sa’) of staple food; today many organisations set a cash amount equal to the local price of that food. Check the figure announced by your mosque or national body each Ramadan.
Common mistakes
- Paying 2.5% only on the amount above the nisab, instead of on the whole.
- Deducting the entire outstanding mortgage.
- Forgetting gold jewellery, money owed to you or business stock.
- Using an out-of-date gold or silver price.
- Mixing up the lunar and solar year.
Checklist
- Fix your annual zakat date (preferably a Hijri date).
- List all zakatable assets at current value.
- Deduct debts due in the coming year.
- Compare with the nisab (gold or silver) on that date.
- Pay 2.5% of the total if above the nisab.
- Keep records for next year and ask a scholar about grey areas.
For the percentage maths, see how to calculate percentages.