How Zakat Is Calculated

Zakat is an annual obligation of 2.5% on qualifying wealth that has been held for one lunar year (hawl), provided the wealth is above a minimum threshold called nisab. This guide explains the calculation practically; for rulings specific to your situation, consult a qualified scholar.

What counts as zakatable wealth

Generally included: cash (in hand and bank), gold and silver (by current market value), investments and shares, business stock (inventory for sale), and money reliably owed to you. Generally excluded: your home, personal car, furniture, and tools of your trade. Debts you owe are subtracted.

The nisab threshold

Nisab is the minimum wealth before Zakat is due — the value of 87.48 grams of gold or 612.36 grams of silver. Because gold and silver prices move, nisab changes too; check the current value in your currency. Many scholars advise using the silver nisab, since the lower threshold means more charity reaches those in need.

A worked example

Suppose you have Rs 500,000 in savings, gold worth Rs 300,000, and Rs 100,000 of debt to repay. Net zakatable wealth = 500,000 + 300,000 − 100,000 = Rs 700,000. If that is above nisab and held for a lunar year, Zakat due = 700,000 × 2.5% = Rs 17,500.

Common questions

Salary? It is the savings that remain at your Zakat date that count, not income as it arrives. Jewellery in use? Schools of thought differ — gold and silver are generally zakatable in the Hanafi view even when worn; ask your scholar. Property? A home you live in is exempt; property bought to resell is business stock.

Work out yours with the free Zakat Calculator — add your assets and debts, set the nisab, and see the amount due.