Zakat is the third pillar of Islam, an obligatory annual charity that purifies your wealth and supports those in need. Yet many Muslims find the actual calculation confusing: What counts as zakatable wealth? What is the Nisab? How much do I owe? This guide walks you through it clearly, step by step.
What Is Zakat?
Zakat is a compulsory act of worship in which eligible Muslims give a fixed portion of their qualifying wealth each year to specified categories of recipients. It is not a tax or a donation of goodwill — it is a right that the poor hold over the wealth of those who can afford to give. The standard rate is 2.5% of your net zakatable assets, provided your wealth stays above the Nisab threshold for one full lunar year.
Step 1: Understand the Nisab
The Nisab is the minimum amount of wealth a Muslim must possess before Zakat becomes obligatory. It is calculated based on the value of either gold or silver:
Gold Nisab: the value of 87.48 grams of gold.
Silver Nisab: the value of 612.36 grams of silver.
Most scholars recommend using the silver Nisab, because it sets a lower threshold and therefore benefits a greater number of poor and needy recipients. If your total wealth equals or exceeds this value, Zakat is due.
Step 2: Identify Your Zakatable Assets
Not everything you own is subject to Zakat. The following are generally zakatable:
Cash in hand and in bank accounts.
Gold and silver, whether jewellery, coins, or bars.
Investments, shares, and mutual funds held for growth.
Business merchandise and stock-in-trade.
Money owed to you that you reasonably expect to recover.
Your personal home, car, clothing, and household items used for daily living are generally not zakatable.
Step 3: Subtract Your Liabilities
From your total zakatable assets, you may deduct immediate debts and bills that are currently due — such as outstanding payments, rent, or short-term loans. What remains is your net zakatable wealth.
Step 4: Apply the 2.5% Rate
Once you have your net zakatable wealth, and it sits at or above the Nisab, simply calculate 2.5% of that amount. That figure is your Zakat due for the year.
Calculate Your Zakat Instantly
Rather than working through the maths by hand, use our free Zakat Calculator below. Enter your assets and liabilities, set the current gold and silver rates, and it will tell you exactly how much Zakat you owe:
👉 Use the Ustadh Zakat Calculator
When Is Zakat Due?
Zakat becomes payable once a full lunar (Hijri) year has passed over wealth that has remained at or above the Nisab. Many Muslims choose to pay their Zakat during Ramadan to benefit from the increased reward of the blessed month, though it may be paid at any point in the year once it becomes due.
A Note on Accuracy
Gold and silver prices change daily, so always update the rates before calculating. For complex situations — such as business partnerships, agricultural produce, or mixed investment portfolios — it is best to consult a qualified scholar to ensure your Zakat is calculated correctly.