About Zakat

What is Zakat?

The Arabic word zakāh means both purification and growth. By giving a small, fixed portion of one's accumulated wealth each lunar year, a Muslim purifies what remains and, through the redistribution it sets in motion, grows the economic wellbeing of the whole community.

Zakat is one of the five pillars of Islam alongside the testimony of faith (shahādah), the five daily prayers (ṣalāh), the fast of Ramadan (ṣawm), and the pilgrimage to Makkah (ḥajj) — a duty upon every adult Muslim who meets the financial threshold.

Who must pay

A Muslim owes Zakat when two conditions are both met for the same wealth:

Nisab — the threshold

Your zakatable wealth must equal or exceed the value of either 85 grams of gold or 595 grams of silver. Most contemporary scholars recommend using the silver nisab because it yields a lower threshold — more people become eligible to receive aid, and more give it.

Ḥawl — the lunar year

Zakatable wealth must be held for a complete Islamic lunar year (approximately 354 days). Your Zakat anniversary is the date on which your wealth first crossed the nisab; Zakat is then due on that same date each Hijri year — not on whatever happened to pass through your account in between.

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What is Zakat payable on?

Zakat applies to productive, growing wealth — not to essential personal possessions like your home, car, or clothing. The main zakatable categories are:

Cash — in hand, in bank accounts, in digital wallets.
Gold & silver — bullion, coins, and (per the majority) jewellery.
Business inventory — goods bought for resale, at market value.
Recoverable loans — money owed to you by a reliable debtor.
Stocks & shares — at full market value, or the underlying zakatable assets for long-term investors.
Retirement accounts — based on accessibility; annual Zakat is netted against the penalty and tax one would pay to withdraw.
Cryptocurrency — per AAOIFI, treated like a currency/asset: 2.5% of its full market value.

The eight recipients

In Sūrat at-Tawbah (9:60) Allah specifies exactly who may receive Zakat — and, by implication, who may not:

Al-Fuqarāʾ — the destitute, who have almost nothing.
Al-Masākīn — the needy, whose income does not meet their basic needs.
Those employed to collect it — Zakat administrators.
Those whose hearts are to be reconciled — new Muslims and others.
To free captives — classically slaves; today often applied to freeing those in bondage.
Those in debt — those who cannot pay back what they owe.
In the cause of Allah (fī sabīlillāh) — classically military defence; contemporary scholars extend this to education, daʿwah, and relief.
The traveller — the wayfarer stranded from their wealth.

Zakat given to anyone outside these eight categories does not count as Zakat — which is why most Muslims distribute through an established charity that separates Zakat funds from general donations.

When to pay

Zakat is calculated on your anniversary date (Hijri), but it may be given at any time. Many Muslims choose Ramadan for the multiplied spiritual reward; the obligation itself is annual and not tied to any particular month.

If you have never paid Zakat before and suspect past years were due, you owe them retrospectively. Estimate your zakatable wealth at the end of each missed year and pay it — backpayment is a recognised obligation, not a voluntary act.

Further study

The content across this calculator is drawn from the contemporary teaching of Shaykh Majed Mahmoud, whose YouTube series covers each asset type in depth, with evidences and worked examples.

▶Watch: Shaykh Majed Mahmoud's Rulings of Zakat playlist

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