How to calculate Zakat

In short: Zakat is 2.5% of the surplus wealth you have held for one lunar year, as long as that wealth is at or above a minimum threshold called the nisab. If you would rather just enter your numbers, use the free Zakat calculator. Otherwise, read on.

Step 1 — Add up your zakatable assets

Zakat is due on wealth that grows or sits as surplus, not on the things you use day to day. Add together:

• Cash — in hand, in your bank accounts, and in savings.
• Gold and silver — by value. (Whether everyday jewellery is included differs between schools; check the view you follow.)
• Investments and shares — held for growth or trade.
• Business assets — stock, inventory and trade goods at their sale value.
• Money owed to you — loans you expect to be repaid.

Step 2 — Subtract what you owe

Deduct debts and liabilities that are currently due — for example an overdue bill or a loan repayment. What remains is your net zakatable wealth.

Net wealth = (cash + gold and silver + investments + business assets + money owed to you) − debts due.

Step 3 — Check against the nisab

The nisab is the minimum you must hold before Zakat becomes due. It is the value of 87.48g of gold or 612.36g of silver at today's prices. Because silver is cheaper, its nisab is lower, so many scholars recommend using the silver value: it means more people give and more people benefit. If your net wealth is below the nisab, no Zakat is due for that year.

Step 4 — Give 2.5%

If your wealth is at or above the nisab and you have held it for a full lunar year (a hawl), give 2.5% of your net zakatable wealth. Many people choose to pay in Ramadan for the extra reward, but it is due whenever your Zakat year completes.

A worked example

Suppose you have £6,000 in savings, £1,500 of gold, and £500 owed to you, and you owe £1,000 on a due debt. Your net wealth is £6,000 + £1,500 + £500 − £1,000 = £7,000. If that is above the nisab, your Zakat is 2.5% of £7,000 = £175.

Who can receive Zakat

The Qur'an names eight categories, including the poor, the needy, and those in debt. Most people give through a trusted charity or their local Zakat body, which distributes it correctly on their behalf.

Guidance only. This is a simple overview using the widely-followed 2.5% rate and nisab. Rulings vary by school of thought and by personal circumstance. For anything complex, confirm with a qualified scholar or your local Zakat body.