What is a Zakat Calculator?

A zakat calculator is a free online tool that helps Muslims calculate their annual zakat obligation based on Islamic principles. Zakat, one of the Five Pillars of Islam, is a mandatory charitable contribution of 2.5% on qualifying wealth held for one lunar year. Whether you have cash savings, gold, silver, investments, business assets, or other zakatable wealth, our calculator helps you determine the exact amount you owe to fulfill this sacred religious duty and purify your wealth.

How to Use the Zakat Calculator

Calculating your zakat is straightforward:

1. Select Calculation Date: Choose your lunar year completion date (or Ramadan date)
2. Enter Cash Holdings: Include savings, checking accounts, and cash at hand
3. Add Gold: Input weight in grams or ounces (or value)
4. Add Silver: Enter silver holdings by weight or value
5. Include Investments: Add stocks, bonds, retirement accounts, cryptocurrencies
6. Business Assets: Include inventory, trade goods, and receivables
7. Add Other Assets: Include money owed to you, investment properties (rental income)
8. Subtract Debts: Deduct immediate debts and liabilities
9. Calculate: See if you meet nisab and your zakat amount
10. View Results: Your total zakatable wealth and 2.5% zakat due

Understanding Zakat: The Third Pillar of Islam

What is Zakat?

• Meaning: Purification and growth
• Rate: 2.5% (or 1/40th) of qualifying wealth
• Frequency: Annually, after one lunar year (hawl)
• Purpose: Wealth purification, helping the poor, social welfare
• Obligation: Mandatory for every adult Muslim meeting nisab threshold

The Five Pillars of Islam

1. Shahada: Declaration of faith
2. Salah: Five daily prayers
3. Zakat: Obligatory charity (2.5% of wealth)
4. Sawm: Fasting during Ramadan
5. Hajj: Pilgrimage to Mecca (if able)

Who Must Pay Zakat?

Requirements:

• Muslim (adult and sane)
• Owns wealth above nisab threshold
• Wealth held for one complete lunar year (hawl)
• Wealth is in excess of basic needs
• Free from debt (or debt doesn't reduce wealth below nisab)

Who is Exempt?

• Those whose wealth is below nisab
• Those in debt exceeding their wealth
• Children (though guardians may pay on their behalf)
• Individuals with only basic necessities

Nisab: The Minimum Threshold

What is Nisab?

The minimum amount of wealth required before zakat becomes obligatory.

Gold Standard: 87.48 grams (3 oz or 7.5 tola) of gold

Silver Standard: 612.36 grams (21.5 oz or 52.5 tola) of silver

Current Practice: Use whichever is lower in value (typically silver), making more people eligible to pay zakat and increasing charity to the needy.

Nisab Calculation Example (2024)

Gold Nisab (87.48 grams):

• Gold price: $65 per gram
• Nisab threshold: 87.48 × $65 = $5,686

Silver Nisab (612.36 grams):

• Silver price: $0.85 per gram
• Nisab threshold: 612.36 × $0.85 = $521

Note: Prices fluctuate daily. Always check current market rates.

Which Nisab to Use?

Scholarly Opinion: Most contemporary scholars recommend using the silver nisab as it results in more charity reaching those in need. Using the lower threshold (usually silver) means more Muslims qualify to pay zakat, thereby helping more people.

Assets Subject to Zakat (Zakatable Assets)

Cash and Bank Accounts

• Zakatable: All cash, savings, and checking accounts
• Amount: Full value
• Rate: 2.5%

Includes:

• Cash at home
• Checking account balances
• Savings accounts
• Foreign currency holdings
• Digital wallet balances

Gold and Silver

• Zakatable: All gold and silver held as wealth
• Calculation: By weight or current market value
• Rate: 2.5%

Includes:

• Gold jewelry (if worn rarely or held as investment)
• Silver jewelry and ornaments
• Gold/silver coins and bars
• Investment-grade precious metals

Exempt: Personal jewelry regularly worn (according to some scholars)

Stocks, Bonds, and Investments

• Zakatable: Investment portfolios and securities
• Calculation: Current market value
• Rate: 2.5%

Includes:

• Publicly traded stocks
• Mutual funds
• Bonds and securities
• Investment accounts
• Cryptocurrency holdings
• Retirement accounts (401k, IRA - debated among scholars)

Two Approaches:

1. Full Value: Zakat on entire market value (more common)
2. Profit Only: Zakat only on gains/dividends (minority opinion)

Business Assets and Inventory

• Zakatable: Goods held for trade and business assets
• Calculation: Current market/wholesale value
• Rate: 2.5%

Includes:

• Merchandise inventory
• Raw materials for sale
• Trade goods
• Business cash reserves
• Accounts receivable (money owed to you)

Exempt: Fixed assets (buildings, equipment, vehicles used in business)

Real Estate and Property

Zakatable Investment Property:

• Rental property income (if above nisab after expenses)
• Properties held for resale
• Land purchased for investment

Exempt:

• Primary residence
• Personal use property
• Buildings/equipment used in business

Calculation:

• Rental income: Include annual net rental income
• Investment property: Include current market value if held for resale

Agricultural Produce

• Zakatable: Crops and agricultural products
• Rate: 5% (irrigated) or 10% (rain-fed)
• Threshold: 5 wasq (approximately 653 kg or 1,440 lbs)

Includes:

• Grains (wheat, rice, barley)
• Fruits (dates, grapes, raisins)
• Other agricultural products

Timing: Paid at harvest time (not after one year)

Livestock

• Zakatable: Grazing animals above nisab
• Rates: Vary by type and quantity
• Includes: Cattle, camels, sheep, goats

Nisab:

• Camels: 5+
• Cattle: 30+
• Sheep/Goats: 40+

Note: Detailed schedules exist for livestock zakat calculations

Pensions and Retirement Accounts

Debated Among Scholars:

Opinion 1: Zakatable immediately (treat as regular wealth)

• Calculate 2.5% annually on full balance

Opinion 2: Zakatable only when withdrawn

• Pay zakat only on amounts actually received

Opinion 3: Pay for past years when withdrawn

• Calculate for all years it was held

Recommendation: Consult a knowledgeable Islamic scholar for your specific situation

Cryptocurrency and Digital Assets

• Modern Ruling: Most scholars treat crypto like currency/commodity
• Zakatable: Yes, based on current market value
• Rate: 2.5%
• Calculation: Value on your zakat date

Includes:

• Bitcoin, Ethereum, and other cryptocurrencies
• NFTs held as investment
• Digital tokens

Deductible Liabilities

What Debts Can Be Deducted?

Immediate Debts (due within the year):

• Personal loans
• Credit card balances
• Business debts
• Rent/mortgage payments due
• Unpaid bills

Calculation: Deduct from total assets before calculating zakat

Example:

• Total Assets: $20,000
• Immediate Debts: $5,000
• Zakatable Wealth: $15,000
• Zakat Due: $15,000 × 2.5% = $375

What Cannot Be Deducted?

Long-term Debts (according to many scholars):

• Mortgage on primary residence
• Student loans (debated)
• Long-term business loans

Reasoning: These are spread over many years and don't immediately impact your ability to pay zakat

Note: Scholarly opinions vary on this matter

Zakat Calculation Examples

Example 1: Simple Calculation

Assets:

• Cash savings: $10,000
• Checking account: $2,000
• Total: $12,000

Debts: None

Nisab Check: $12,000 > $521 (silver nisab) ✓

Zakat Calculation:

• Zakatable wealth: $12,000
• Zakat rate: 2.5%
• Zakat due: $300

Example 2: With Investments

Assets:

• Cash: $5,000
• Stocks: $15,000
• Gold (50 grams at $65/gram): $3,250
• Total: $23,250

Debts:

• Credit card: $1,500

Net Zakatable Wealth: $23,250 - $1,500 = $21,750

Nisab Check: $21,750 > $521 ✓

Zakat Calculation:

• Zakat due: $21,750 × 2.5% = $543.75

Example 3: Business Owner

Assets:

• Business cash: $8,000
• Business inventory (wholesale value): $25,000
• Accounts receivable: $5,000
• Personal savings: $10,000
• Total: $48,000

Debts:

• Business loan payment due this year: $3,000
• Personal credit card: $1,000
• Total Debts: $4,000

Net Zakatable Wealth: $48,000 - $4,000 = $44,000

Zakat Calculation:

• Zakat due: $44,000 × 2.5% = $1,100

Example 4: Below Nisab (No Zakat Due)

Assets:

• Savings: $400
• Cash: $100
• Total: $500

Nisab Check: $500 < $521 (silver nisab) ✗

Zakat Due: $0 (below nisab threshold)

Frequently Asked Questions (FAQs)

How much zakat should I pay?

Zakat is 2.5% (or 1/40th) of your qualifying wealth held for one lunar year. Calculate your total zakatable assets, subtract immediate debts, and multiply by 0.025. If your wealth is below nisab, no zakat is due.

When should I pay zakat?

Zakat becomes due after your wealth has been above nisab for one complete lunar year (hawl). Many Muslims choose to pay during Ramadan for increased reward, but you can set your own annual date and pay on that date each year.

What is the nisab threshold?

Nisab is the minimum wealth threshold. It equals the value of 87.48 grams of gold OR 612.36 grams of silver. Most scholars recommend using the silver nisab (currently ~$520-600) as it helps more people in need.

Do I pay zakat on my house?

No zakat on your primary residence. Zakat is due on rental properties held as investment (on rental income or property value if held for resale), but not on your home where you live.

Is zakat due on jewelry?

Opinions vary. Most scholars say zakat is due on gold/silver jewelry held as investment or rarely worn. Personal jewelry worn regularly may be exempt according to some scholars. When in doubt, paying zakat on it is the safer option.

Do I pay zakat on my 401k or retirement account?

Scholars differ on this. Some say yes (pay annually on the full balance), others say no (pay only when withdrawn), and some say pay for all past years when you withdraw. Consult an Islamic scholar for guidance.

Can I pay zakat monthly or must it be annual?

Zakat is calculated annually, but you can pay it in installments throughout the year for convenience. You can also pay in advance. What matters is ensuring you've paid at least 2.5% of your qualifying wealth annually.

Do I deduct my mortgage from zakatable wealth?

Scholars differ. Many say no, because mortgages are long-term debts spread over many years. Others allow deducting the portion due within the year. The primary residence itself is not zakatable regardless.

Is zakat the same as income tax?

No. Zakat is a religious obligation to purify wealth and help the poor. It's calculated on accumulated wealth held for a year, not just annual income. You must pay both zakat (to eligible recipients) and taxes (to government).

Who can receive my zakat?

Eight categories mentioned in the Quran: the poor, the needy, zakat administrators, those whose hearts are to be reconciled, those in bondage, those in debt, in the cause of Allah, and travelers in need. Generally given to poor and needy Muslims.

Can I give zakat to family?

Yes, to extended family in need (siblings, cousins, aunts, uncles). No to immediate dependents you're already obligated to support (parents, children, spouse). Supporting needy family is actually more rewarding.

What if I don't know my exact wealth?

Estimate to the best of your ability. It's better to overestimate and pay slightly more than to underestimate and underpay. Review bank statements, investment accounts, and other records to calculate accurately.

Is zakat on gross or net wealth?

Net wealth. Subtract immediate debts and liabilities from your total assets before calculating zakat. Only pay on what you truly own after obligations.

Can I pay zakat on someone else's behalf?

Yes, with their permission. Parents can pay for children, spouses can pay for each other, and you can gift money specifically for someone to pay their zakat. The intention matters.

What happens if I miss paying zakat?

Zakat remains an obligation that must be fulfilled. Calculate what you owed for missed years and pay it as soon as possible, even if it takes time. Seek forgiveness and don't delay future payments.

The Eight Categories of Zakat Recipients

As specified in the Quran (Surah At-Tawbah 9:60):

1. Al-Fuqara (The Poor)

Those who have insufficient means to meet basic needs

2. Al-Masakin (The Needy)

Those who are destitute, worse off than the poor

3. Administrators of Zakat

Those who collect, manage, and distribute zakat

4. Those Whose Hearts Are To Be Reconciled

New Muslims or those considering Islam who need support

5. Those in Bondage

Freeing slaves and captives (historically); helping those trapped in oppressive situations (modern interpretation)

6. Those in Debt

People burdened by debt who cannot repay it

7. In the Cause of Allah

Promoting Islam, Islamic education, and supporting those working in the path of Allah

8. Travelers in Need

Stranded travelers who have run out of resources (includes refugees in modern context)

Zakat vs. Sadaqah vs. Zakat al-Fitr

Zakat (Annual Wealth Tax)

• Obligatory: Yes (Third Pillar of Islam)
• Amount: 2.5% of wealth
• Frequency: Annual
• Threshold: Must meet nisab
• Timing: After one lunar year

Sadaqah (Voluntary Charity)

• Obligatory: No (voluntary)
• Amount: Any amount, no limit
• Frequency: Anytime, as often as desired
• Threshold: None
• Recipients: Anyone in need

Zakat al-Fitr (Ramadan Charity)

• Obligatory: Yes (on all Muslims)
• Amount: Fixed amount of food or its value (~$10-15 per person)
• Frequency: Once yearly (Ramadan)
• Threshold: Anyone who can afford it
• Timing: Before Eid prayer
• Purpose: Purify the fast, help the poor celebrate Eid

Best Practices for Paying Zakat

1. Calculate Accurately

Use a calculator, review all accounts, and include all zakatable assets. Better to pay slightly more than underpay.

2. Set an Annual Date

Choose a consistent date each year (many choose Ramadan 1st or last ten nights). Maintain records of your calculation date.

3. Keep Records

Document your calculation, assets, and payments. This helps with annual calculations and ensures you don't miss anything.

4. Pay Promptly

Don't delay once zakat is due. The wealth belongs to the recipients once the year is complete.

5. Give to Deserving Recipients

Verify recipients are eligible. Use reputable organizations that distribute zakat properly according to Islamic guidelines.

6. Intend Properly

Make the intention (niyyah) that you're paying your obligatory zakat. The intention is required for zakat, unlike general charity.

7. Pay Locally When Possible

Prioritize local poor and needy, then expand outward. However, paying where need is greatest is also valid.

8. Don't Publicize

Paying zakat privately is encouraged, though paying publicly to encourage others is permissible. Don't boast or show off.

Zakat on Specific Assets

Cryptocurrency

• Status: Zakatable (like cash/commodities)
• Calculation: Market value on zakat date
• Rate: 2.5%
• Includes: Bitcoin, Ethereum, all cryptocurrencies

Stock Market Investments

• Two Opinions:
  1. Entire portfolio value (more cautious)
  2. Only zakatable portion (liquid assets of companies)
• Recommendation: Full value calculation is simpler and safer

Rental Properties

• Building: Not zakatable (fixed asset)
• Rental Income: Zakatable if held for one year above nisab
• Calculation: Include net rental income in wealth calculation

Loans Given to Others

• Zakatable: Yes, if you expect repayment
• When: Some scholars say when you receive it, others say pay each year as part of your wealth
• Bad Debts: No zakat on loans you don't expect to recover

Business Inventory

• Zakatable: Yes, at wholesale/market value
• Calculation: Value of goods intended for sale
• Exempt: Equipment, buildings, vehicles (fixed assets)

Gold/Silver Ornaments

• Pure Investment: Zakatable
• Personal Use (Regularly Worn): Debated (many scholars exempt)
• Rarely Worn: Most scholars say zakatable
• Recommendation: Pay on it to be safe

Zakat During Economic Hardship

If You Fall Below Nisab

• No zakat is due
• Focus on meeting your basic needs
• You may become a zakat recipient yourself
• No shame in receiving help when needed

If Barely Above Nisab

• Zakat is still obligatory
• Trust that Allah will replace what you give
• The blessing of paying zakat outweighs the amount

Payment Difficulties

• Pay in installments if needed
• Sell non-essential zakatable assets if necessary
• Seek advice from Islamic scholars
• Don't delay—it remains an obligation

Modern Zakat Considerations

Digital Economy

• Online businesses: Calculate inventory and cash
• Freelance income: Pay on retained earnings above nisab
• Digital products: Business cash and receivables are zakatable

Global Giving

• Valid to send zakat anywhere in the world
• Prioritize areas of greatest need
• Use trusted organizations for international distribution

Investment Portfolios

• Include all stocks, bonds, mutual funds
• Calculate on market value on your zakat date
• Don't forget dividend income in cash accounts

Multiple Income Sources

• Combine all zakatable wealth
• Set one annual date for all calculations
• Maintain detailed records

Spiritual Benefits of Paying Zakat

Purification of Wealth

Allah says wealth is purified through zakat. Paying cleanses your possessions and removes greed.

Protection from Calamity

Hadith indicates that giving charity protects from trials and difficulties.

Increased Blessings (Barakah)

Allah replaces what is given in charity. Paying zakat increases blessings in your remaining wealth.

Social Responsibility

Fulfills your duty to society and helps reduce poverty and inequality.

Spiritual Growth

Develops generosity, reduces attachment to material wealth, and strengthens faith.

Following the Prophet's Example

The Prophet (PBUH) was the most generous, especially during Ramadan.

Zakat Organizations and Distribution

Choosing a Zakat Organization

Criteria to Consider:

• Islamic authenticity (follow Shariah guidelines)
• Transparency (financial reports available)
• Low administrative costs (more reaches the needy)
• Proper recipient verification
• Local vs. international reach
• Reputation in the Muslim community

Distributing Yourself vs. Through Organizations

Distributing Yourself

• ✓ Direct connection with recipients
• ✓ Ensure proper eligibility
• ✓ No administrative costs
• ✗ Time-consuming
• ✗ Limited reach
• ✗ May miss those most in need

Through Organizations

• ✓ Wider reach
• ✓ Professional distribution
• ✓ Access to neediest areas
• ✓ Convenient
• ✗ Administrative costs
• ✗ Less personal connection