How to Calculate Zakat: A Simple Guide with Examples
Zakat is the third pillar of Islam and a right of the poor upon the wealth of those who can afford it. Allah commands: “And establish prayer and give Zakat…” (Quran 2:43). Calculating it correctly is simpler than many people think. This guide walks you through it step by step.
Note: this is a general guide. Scholars differ on some details, so for complex situations — business assets, shares, pensions or property — consult a qualified scholar.
Who must pay Zakat?
Zakat is due from an adult, sane Muslim whose zakatable wealth:
- reaches or exceeds the Nisab (the minimum threshold), and
- has been held for one full lunar year (Hawl, about 354 days).
Many people choose a fixed date — such as 1 Ramadan — as their annual Zakat date and calculate their wealth on that day each year.
Step 1: Work out the Nisab
The Nisab is based on the value of:
- Gold: 87.48 grams (7.5 tola), or
- Silver: 612.36 grams (52.5 tola).
Multiply by today’s price per gram in your currency. Because silver is much cheaper, the silver Nisab is lower; many scholars recommend it for mixed wealth such as cash and savings because it benefits more of the poor, while others use the gold standard. Ask a scholar you trust which to follow.
Step 2: Add up your zakatable assets
- Cash at home and in bank accounts
- Gold and silver (jewellery included according to many scholars — opinions differ on jewellery worn regularly)
- Money owed to you that you expect to be repaid
- Business stock and goods held for sale, at their current sale value
- Investments and shares, according to their type (ask a scholar for details)
- Rental income that you still hold (not the rented property itself)
Not zakatable: your home, personal car, furniture, clothes and other items for personal use.
Step 3: Deduct immediate liabilities
Subtract debts and bills that are due now — for example money you must repay, overdue bills and the current instalments of long-term loans. Scholars differ on long-term debts such as full mortgages; many deduct only the portion currently due.
Step 4: Compare with the Nisab and pay 2.5%
If your net zakatable wealth is at or above the Nisab, your Zakat is 2.5% of the total (divide by 40).
Worked examples
The prices below are illustrative only — always use current prices.
Example 1: Savings
Cash and savings: 500,000. Debts due now: 50,000. Net wealth: 450,000. If the Nisab (by your chosen standard) is below 450,000, Zakat due = 450,000 × 2.5% = 11,250.
Example 2: Gold
You own 100 grams of gold, which is above the gold Nisab of 87.48 g. If gold is valued at 20,000 per gram, its value is 2,000,000 and Zakat = 2,000,000 × 2.5% = 50,000 (or you can give 2.5 grams of gold).
Example 3: Below Nisab
If your total net wealth is below the Nisab on your Zakat date, no Zakat is due that year — though voluntary charity (Sadaqah) is always rewarded.
Save time with our free Zakat calculator: enter your assets, debts and today’s gold or silver price, and it does the maths for you.
Who can receive Zakat?
Allah names eight categories of recipients (Quran 9:60): the poor, the needy, those employed to collect Zakat, those whose hearts are to be reconciled, freeing captives, those in debt, in the cause of Allah, and the stranded traveller. Zakat cannot be given to your own parents, grandparents, children or grandchildren, and according to most scholars a husband cannot give it to his wife (scholars differ on a wife giving it to a needy husband).
Frequently Asked Questions
What percentage is Zakat?
Zakat on wealth such as cash, gold, silver and trade goods is 2.5% of the net zakatable amount held for a lunar year above the Nisab.
Should I use the gold or silver Nisab?
Both are valid opinions. Many scholars recommend the silver Nisab for cash and mixed assets because it is more beneficial to the poor; others use gold. Follow the guidance of a scholar you trust.
Is Zakat due on jewellery?
Scholars differ. Some schools require Zakat on all gold and silver jewellery, while others exempt jewellery worn regularly. Paying on it is the more cautious position.
Can I pay Zakat in instalments during the year?
Yes, many scholars allow paying in advance through the year, as long as the full amount is paid by your Zakat date.
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