How to Calculate Zakat (Step by Step)

By the Editorial Team · reviewed against our sources · updated September 2026 · guidance, not a fatwa

The four steps to calculate zakat

Calculating zakat can feel complicated, but the method reduces to four repeatable steps that work for almost every situation:

1. Total your zakatable assets. Add the current market value of all wealth that zakat applies to on your due date.
2. Deduct allowable liabilities. Subtract debts and bills that are due, giving your net zakatable wealth.
3. Compare against nisab. If your net wealth equals or exceeds the nisab threshold, zakat is due; if it falls below, no zakat is owed this year.
4. Pay 2.5%. Multiply your net zakatable wealth by 0.025 (which is one fortieth) to find the amount to give.

The rate of 2.5% applies to monetary wealth, trade goods and precious metals. Different rates apply to farm produce and livestock, which are specialised areas outside the scope of a standard personal calculation.

What counts as zakatable wealth

Zakat is charged on wealth that has the potential to grow or that functions like money. It is not charged on items you own for personal use. The table below summarises the most common categories.

A useful principle: if you own something in order to use it, it is generally exempt; if you own it as a store of value or to sell it, it is generally zakatable.

Deducting debts: short-term versus long-term

You may reduce your zakatable wealth by debts that are genuinely due, because that money is no longer truly at your disposal. The scholarly discussion centres on which debts to deduct.

• Short-term debts such as this month’s rent, utility bills, credit-card balances and the current instalment on a loan are widely agreed to be deductible.
• Long-term debts such as a mortgage or a multi-year business loan are treated differently. A common contemporary position is to deduct only the amount due within the coming twelve months (or the next instalment), rather than the entire outstanding balance, so that a large mortgage does not permanently wipe out any zakat liability.

Some earlier scholars allowed deducting the whole debt, while many contemporary bodies restrict the deduction to imminent payments. Because madhhabs and fatwa bodies differ, choose one consistent approach and apply it each year.

Choosing the gold or silver nisab

Nisab is the minimum wealth at which zakat becomes obligatory. It is defined two ways: the value of 87.48 grams of gold or the value of 612.36 grams of silver. Because silver is far cheaper per gram, the silver nisab produces a much lower threshold in modern currency.

Many charities and scholars recommend the silver nisab because it is more cautious and channels more support to recipients. Others use the gold nisab, especially where a person’s wealth is mainly in cash. Read our full guide to the nisab threshold for current values and the reasoning behind each view.

The hawl and your zakat anniversary

Zakat becomes due only after your wealth has met or exceeded nisab for one full lunar (hijri) year, known as the hawl. In practice this means picking a fixed date in the Islamic calendar as your zakat anniversary.

On that date each year you value everything you own. You do not need to track the day-by-day movement of your balance. The rule most commonly applied is that the hawl is measured from when your wealth first reached nisab; if it dips slightly below during the year but is back at or above nisab on your anniversary, zakat is still due. Only if your wealth falls to zero, or stays below nisab across the whole year, does the count reset.

Because a lunar year is roughly eleven days shorter than a solar year, using a Gregorian date will gradually drift; if you calculate on a solar date, some scholars advise using a slightly higher rate (about 2.577%) to compensate. The cleanest approach is simply to fix a hijri date.

Calculating zakat on cash and salary

Cash is the simplest category. Add together the money in your wallet, current accounts, savings accounts and any digital wallets, plus any loans you have made to others that you expect to be repaid.

Salary is not zakated when it arrives. Instead, whatever remains of your salary on your zakat anniversary is counted as part of your cash. If you spend your income during the year, only the balance held on your due date is zakatable. See zakat on cash for how to treat pensions, deposits and money set aside for bills.

Example: if you hold 8,000 in savings and 500 in your current account on your due date, your cash total is 8,500.

Calculating zakat on gold by grams

Zakat on gold is based on weight, not on what you originally paid. Weigh your gold, note its purity (carat), and multiply the weight by the current market price per gram for that purity.

Example: you own 40 grams of 22-carat gold. If the market price of 22-carat gold is 50 per gram on your due date, the zakatable value is 40 x 50 = 2,000. Zakat on that portion is 2.5% = 50.

Schools differ on jewellery worn regularly for personal adornment: the Hanafi school treats gold and silver jewellery as always zakatable, while the Maliki, Shafi’i and Hanbali schools generally exempt jewellery in normal personal use. Our zakat on gold guide explains each position; where you are unsure, paying is the more cautious choice.

Calculating zakat on silver

Silver is treated the same way as gold: value it by weight at the current market price. Silver is also the basis for the lower nisab threshold. If you own silver coins, bars or tableware held as a store of value, include the full market value. Combine the value of your gold and silver with your cash when comparing to nisab. See zakat on silver for detail on mixed holdings and silverware.

Calculating zakat on shares and investments

How you treat shares depends on your intention:

• Shares bought to trade (you intend to sell for profit): pay 2.5% of their full market value on your due date.
• Shares held long-term for dividends: a common method is to pay zakat only on the zakatable assets underlying the company (cash and inventory), often estimated at around a quarter to a third of the share value, plus any dividends received. A simpler, more cautious alternative is to pay 2.5% of the full value.

Funds, ETFs and pensions follow the same logic based on the underlying assets and your access to them. Our zakat on stocks page walks through both the detailed and simplified methods with examples.

Calculating zakat on business assets

For a business, zakat is charged on the net zakatable assets, not on turnover or profit alone. Add stock and inventory held for sale (at current selling or cost value, depending on the method you follow), cash in business accounts, and receivables you expect to collect. Then deduct short-term business liabilities.

Fixed assets used to run the business, such as premises, vehicles, machinery and computers, are not zakatable because they are tools of the trade rather than goods for sale. See zakat on business for partnerships, bad debts and work in progress. A property held to rent out is not itself zakatable, but the rental income saved is.

Calculating zakat on cryptocurrency

The majority contemporary view treats cryptocurrency held as an investment or as a medium of exchange like cash: value your holdings at the market price on your due date and pay 2.5%. Coins held as trading stock by an active trader are treated like business inventory. As with shares, if you are uncertain, valuing the full amount is the cautious approach.

A full worked example

Suppose your zakat anniversary arrives and you own the following. Nisab is met, and you have held wealth above nisab all year.

The calculation is: 17,000 x 0.025 = 425. Note that the full mortgage balance was not deducted, only the instalments falling due within the year, in line with the common contemporary approach.

Zakat on savings earmarked for a goal

Money you have set aside for a future purpose, such as saving for hajj, a house deposit, a wedding, education or a car, is still zakatable while it sits in your possession. The intention to spend it later does not remove the obligation, because the wealth is currently yours and available. So if you have 12,000 saved towards a property deposit on your due date, it is included in your zakatable total like any other cash. The only amounts you deduct are debts and bills genuinely due now, not future spending plans. This surprises many people, but it keeps the rule simple and consistent: zakat looks at what you actually hold on your anniversary, not at what you intend to do with it.

Zakat on money you have lent to others

A loan you have given to someone you expect to be repaid counts as your wealth, so it is zakatable. A common approach is to pay zakat on such a good debt each year along with your other assets, since the money is still owed to you. A debt you consider doubtful or unlikely to be recovered can be left out until it is actually repaid, at which point some scholars advise paying the zakat then, and some advise paying only for the current year. Choose a consistent method and apply it each time.

Monthly versus annual payment

Zakat is fundamentally an annual obligation tied to your hawl. However, you may pay it in advance in monthly instalments for convenience, provided you reconcile the total against the actual amount due on your anniversary. If you paid too little across the year, you top up on your due date; if you paid too much, the surplus counts as voluntary charity or against next year. Paying monthly can make a large sum more manageable and keep giving consistent.

Common mistakes to avoid

• Forgetting to include money owed to you that you expect to be repaid.
• Deducting an entire mortgage balance rather than only imminent instalments.
• Valuing gold at purchase price instead of the current market rate.
• Using an average balance rather than the snapshot on your due date.
• Skipping the hawl and treating money as zakatable when overall wealth never met nisab for the year.
• Ignoring business receivables and inventory.
• Letting a Gregorian date drift against the lunar calendar without adjusting the rate.

When in doubt, our free calculator totals each category and applies the correct rate so you do not miss anything.

This page is guidance only, not a fatwa; rulings vary by madhhab; consult a qualified scholar for your specific circumstances.

Frequently asked questions