Zakat is the annual obligatory charity in Islam: 2.5% of qualifying wealth held for a lunar year, due once that wealth exceeds a threshold called the nisab. The rules on what counts are broadly agreed; the details, especially on debts, retirement accounts and the nisab standard, vary by school and scholar. This calculator follows the common approach and lets you set the choices that differ.
How it is calculated
- Add up zakatable assets: cash and bank balances, gold and silver at today’s value, shares, funds and crypto held as investments, money owed to you that you expect to receive, and business inventory and cash. Your home, car, furniture and personal items are not included.
- Subtract debts that fall due within the coming year: bills, credit cards, the next twelve months of loan instalments. Most scholars do not deduct the full balance of a long-term mortgage.
- Compare the net figure with the nisab: 612.36 g of silver or 87.48 g of gold at today’s prices. If net wealth is at or above the nisab and has been for a lunar year, zakat is due.
- Zakat = 2.5% of net zakatable wealth. (Some calculate 2.577% if using a solar year rather than a lunar year, to account for the 11-day difference.)
Example
$15,000 in the bank, $20,000 in funds, 50 g of gold at $106/g ($5,300), $3,000 of bills due: net wealth $37,300. Silver nisab at $1.25/g is about $765; gold nisab about $9,270. Either way the threshold is passed. Zakat: 2.5% × $37,300 = $932.50.
Points where opinions differ
- Nisab standard: silver gives a much lower threshold and is recommended by many because more people become givers. Others use gold.
- Retirement accounts: many scholars count only the accessible value (after early-withdrawal penalties and tax) or exclude locked pensions until accessible.
- Shares held long-term: some count the full market value; others only the zakatable proportion of the company’s assets (often approximated as 25–40% of market value).
- Jewellery worn regularly: exempt in the Hanafi view is the minority position; most schools count gold and silver jewellery.
When in doubt, ask a scholar or your local zakat authority, and be consistent from year to year.
Frequently asked questions
How much is zakat?
2.5% of your net zakatable wealth, once a lunar year, if that wealth is above the nisab.
What is the nisab?
The minimum wealth at which zakat becomes obligatory: the value of 87.48 g of gold or 612.36 g of silver. At current prices the silver nisab is a few hundred dollars and the gold nisab several thousand; most people use silver.
Do I pay zakat on my house or car?
No. Personal-use property is exempt. Investment property is treated by its rental income (cash you hold) or, if held for resale, by its value.
Do I deduct my mortgage?
Most scholars deduct only the instalments due within the next year, not the whole balance. Deducting the entire mortgage would exempt most homeowners, which is not the traditional position.
Is zakat due on a 401(k) or pension?
Opinions differ. A common approach is to count the amount you could actually withdraw today after penalties and tax, or to exclude locked funds until they become accessible. Follow your scholar’s guidance.
When is zakat due?
One lunar year after your wealth first reached the nisab, and on that same date each year afterwards. Many people choose to pay in Ramadan for the extra reward, calculating on that date.
Sources
- Islamic Relief: Zakat FAQ and nisab
- National Zakat Foundation (UK): How to calculate zakat
- AAOIFI Shariah Standard No. 35: Zakah
By Calcelate Team. Formula from the sources above.
- 2026-09-14 · Formula and texts checked