How to calculate Zakat — complete guide
Zakat is one of the Five Pillars of Islam and an obligatory act of worship for every Muslim whose wealth exceeds the Nisab threshold and has been held for a complete lunar year (Hawl). It is calculated at 2.5% of your total net zakatable wealth.
What is Nisab?
Nisab is the minimum amount of wealth a Muslim must possess before Zakat becomes obligatory. It equals the value of 87.48 grams of gold or 612.36 grams of silver. Most scholars recommend using the silver Nisab as it is lower and ensures more people fulfil their obligation. You can use whichever your madhab (school of thought) recommends.
What assets are zakatable?
- Gold and silver — physical gold, silver jewellery, coins, and bars
- Cash — money at home, in bank accounts, and money owed to you
- Business assets — trade stock, inventory, business cash, and receivables
- Investments — shares, mutual funds, cryptocurrency, property bought for resale
- Savings — pension funds (on accessible portion), savings accounts
What is NOT zakatable?
- Your primary home (where you live)
- Personal vehicle used for daily transport
- Household furniture and appliances
- Property used for your own business (machinery, tools)
Frequently asked questions
Is Zakat due on my gold jewellery?
This is a well-known scholarly difference of opinion. According to the Hanafi school, Zakat is due on all gold regardless of whether it is worn or stored. According to the Shafi'i, Maliki, and Hanbali schools, gold jewellery used for personal adornment is exempt from Zakat. You should follow your own madhab or consult a scholar. Our calculator includes a toggle to accommodate both views.
Can I deduct my mortgage from Zakat?
According to the majority of contemporary scholars, a mortgage on your primary home is not deductible from Zakat. Only immediate debts — money that is due right now — can be deducted. Future loan instalments are generally not deductible. Some scholars do allow one year's instalment to be deducted; consult a scholar for your specific situation.
Is Zakat due on cryptocurrency?
Most contemporary Islamic scholars consider cryptocurrency to be a zakatable asset, treating it similarly to an investment or trade asset. Zakat is calculated on the market value of your cryptocurrency holdings at 2.5%, provided you have held it above the Nisab for a complete lunar year.
When should I pay Zakat?
Zakat should be paid once your wealth has remained above the Nisab for a full lunar year (Hawl). Many Muslims choose to pay during Ramadan for the extra spiritual reward, but you can pay any time during the year. It is recommended to set a fixed date each year — your "Zakat anniversary" — to calculate and pay consistently.
Who can receive Zakat?
The Quran (9:60) specifies eight categories of people eligible to receive Zakat: the poor (fuqara), the needy (masakeen), Zakat administrators, those whose hearts need to be reconciled, freeing those in bondage, those in debt, in the way of Allah, and the traveller in need. It cannot be given to your own dependants (spouse, children, parents) or non-Muslims according to the majority view.