Zakat is 2.5% of the wealth a Muslim has held for one lunar year, once that wealth is above a minimum called the nisab. The arithmetic is simple; most of the work is deciding what counts. This guide covers the common cases in any currency.
Step 1: add up zakatable assets
- Cash at home and in bank accounts.
- Gold and silver, at today's value.
- Shares, funds and other investments.
- Business stock and goods held for sale.
- Money owed to you that you expect to be repaid.
Your home, car, furniture and clothing for personal use are not included.
Step 2: subtract debts due now
Subtract debts and bills that are due now, such as this month's payments. Scholars differ on long-term loans; a common approach is to deduct only the installments currently due.
Step 3: compare with the nisab
The nisab is the value of 85 grams of gold or 595 grams of silver at today's price. The silver nisab is much lower, so more people pay; many scholars recommend it for that reason. If your net wealth is at or above the nisab, and you have held it for a lunar year, zakat is 2.5% of the net amount.
Net wealth
10,000 − 1,000equals9,000
Nisab
595 g × 1.2equals714
Zakat
9,000 × 2.5%equals225
The same person using the gold nisab, with gold at 100 per gram, would have a nisab of 8,500. Their wealth of 9,000 is still above it, so the zakat due is the same: 225.
Cases that need personal guidance
Retirement accounts you can't yet access, jewellery worn every day, business partnerships and long-term receivables all have differing scholarly views. For those, ask a scholar or zakat organization you trust.
Tip: Pick a fixed date each lunar year, such as a date in Ramadan, to calculate zakat. Using the same date every year makes the one-year holding rule simple to follow.