What Zakat is
Zakat is an obligatory annual charity and one of the five pillars of Islam. Allah pairs it with prayer again and again in the Quran: “And establish prayer and give Zakat” (Quran 2:43). It purifies your wealth and redistributes it to the people Allah names in Quran 9:60, including the poor and the needy.
Who has to pay it
Zakat is due from an adult Muslim whose qualifying wealth has stayed at or above the nisab for one full lunar year (a hawl).
The nisab
The nisab is the minimum threshold. It is based on:
- Gold: 85 grams, or
- Silver: 595 grams
Their cash value changes daily. Many scholars and charities recommend the silver nisab because it is lower, which means more Zakat reaches the poor. Check today's gold or silver price, or ask your local mosque which one they use.
What counts as zakatable wealth
- Cash in hand and in bank accounts
- Gold and silver (opinions differ on gold jewellery worn regularly, so follow your scholar)
- Shares, investments and business stock
- Money owed to you that you expect to be repaid
Your home, car, clothes and personal belongings are not zakatable. You can generally deduct debts that are due now.
The calculation in three steps
- Add up all your zakatable wealth.
- Subtract any debts that are due immediately.
- If the result is at or above the nisab, multiply it by 2.5% (divide by 40).
A worked example
Say you have 4,000 in savings, 1,000 in shares and 500 you owe on a bill due this month:
- Zakatable wealth: 4,000 + 1,000 = 5,000
- Minus debts due now: 5,000 − 500 = 4,500
- If 4,500 is above today's nisab, Zakat = 4,500 × 2.5% = 112.50
The currency does not matter. The method is the same everywhere.
When to pay
Zakat is due once a lunar year has passed on your wealth. Many people pick a fixed date, often in Ramadan, and calculate every year on that date. This is a general guide. For complex cases like businesses, pensions or inheritance, ask a qualified scholar.
Quick answers
What is the Zakat rate?
Zakat is 2.5% (one fortieth) of your qualifying wealth that has been above the nisab for one full lunar year.
What is the nisab?
The nisab is the minimum amount of wealth before Zakat is due. It is traditionally set at the value of 85 grams of gold or 595 grams of silver. Its money value changes with market prices, so check today’s value.