Zakat Calculation: A Clear Step-by-Step Guide
Zakat is the obligatory alms on qualifying wealth, typically 2.5% of net zakatable assets held for a lunar year. The arithmetic is simple; the questions are always about what counts and what does not.
This guide explains the standard calculation with a worked example. For complex situations, consult a knowledgeable scholar, as schools of thought differ on details.
What counts as zakatable
Cash, bank balances, gold and silver at market value, stocks and business inventory generally count. Personal home, car, furniture and tools of trade do not.
Debts you owe are subtracted; debts owed to you may count depending on collectability. The net figure is your zakatable wealth.
Zakat applies after wealth has been held for one lunar year (haul) and meets the nisab threshold, roughly the value of 85 g of gold or 595 g of silver depending on the school.
The calculation
Zakat = 2.5% x (zakatable assets - deductible debts). Example: $10,000 cash + $5,000 gold + $2,000 stocks - $1,000 debts = $16,000 net. Zakat = $400.
2.5% is 1/40, so you can also divide the net by 40. On $16,000 that is $400, same answer.
Business owners typically value inventory at wholesale and add receivables, then subtract payables.
Nisab and timing
If your net wealth is below nisab, no zakat is due. Nisab is commonly set by gold (about 85 g) or silver (about 595 g); using silver gives a lower threshold.
Many people pick a fixed lunar date, often Ramadan, to assess everything at once rather than tracking each asset's year.
Fluctuating assets like stocks are valued at market price on the assessment date.
Common questions
Retirement accounts: many scholars say count the accessible value; details vary, so ask locally. Jewelry worn regularly is exempt in some schools and counted in others.
Zakat can be paid in cash or in kind to eligible recipients, the eight categories named in the Quran.
Keep records: list assets, subtract debts, apply 2.5%. The calculator on this site does the arithmetic; the scholarship decides the inputs.
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Try the Zakat Calculator calculatorFrequently asked questions
What percentage is zakat?
2.5% of net zakatable wealth, or one-fortieth.
What is nisab?
The minimum wealth threshold, about 85 g of gold or 595 g of silver in value.
Is zakat due on my house and car?
No, personal-use assets are generally exempt.
Do I subtract debts?
Yes, immediate debts you owe are deducted before applying 2.5%.
When do I pay?
After holding nisab-level wealth for one lunar year; many assess yearly in Ramadan.
Is this religious guidance?
No. This is educational math; consult a scholar for rulings.