How to Calculate Zakat: A Simple Step-by-Step Guide

Zakat is one of the five pillars of Islam — an obligatory act of worship, not a voluntary charity. If your wealth has stayed above a set threshold (the Nisab) for one lunar year, Zakat becomes due. This guide walks through exactly how to work out what you owe.

Step 1: Check if you've reached Nisab

Nisab is the minimum amount of wealth you must hold before Zakat applies to you. It's set at either:

• 87.48 grams of gold, or
• 612.36 grams of silver

Most scholars today recommend calculating Nisab using the silver value. Since silver is worth less than gold, this gives a lower threshold — meaning more people qualify to pay, which increases what reaches those in need. Gold and silver prices change daily, so check a current rate before calculating.

Step 2: Add up your zakatable wealth

Zakat applies to wealth that can grow or be traded — not to things you use personally. Include:

• Cash at home and in bank accounts
• Gold and silver (jewellery included, per most contemporary scholars)
• Money owed to you that you expect to be repaid
• Business stock and trade goods, valued at their current selling price
• Shares and investments held for growth or resale

Leave out your home, car, furniture, clothing and anything else held for personal use rather than growth or trade.

Step 3: Subtract short-term debts

Debts you owe and must repay immediately — this month's bills, a due instalment — can be deducted from your total before calculating Zakat. Long-term debt like the remaining balance on a mortgage is generally not deducted in full; opinions vary here, so if your situation is complex, it's worth asking a knowledgeable local scholar.

Step 4: Calculate 2.5%

Once you have your total zakatable wealth (after subtracting short-term debts), and it's above the Nisab threshold, Zakat is 2.5% of that total.

Worked example

Item	Value
Cash and savings	$8,000
Gold jewellery	$2,000
Money owed to you (expected back)	$500
Short-term debt (deduct)	−$300
Total zakatable wealth	$10,200
Zakat due (2.5%)	$255

When is Zakat due?

Zakat is due once your wealth has remained above Nisab for one full lunar (Hijri) year. Many people choose to calculate and pay it during Ramadan for the extra reward, but any date works as long as you track your own "Zakat anniversary" consistently each year.

Who receives Zakat?

The Qur'an specifies eight categories of recipients, including the poor, the needy, those in debt, and those working to collect and distribute Zakat (Qur'an 9:60). Many people give through a trusted local mosque or established Islamic charity to make sure it reaches eligible recipients correctly.

This guide is for general educational purposes and follows mainstream Sunni scholarship. For a ruling on your specific financial situation, consult a qualified local scholar.