Zakat is one of the five pillars of Islam: an annual payment of 2.5% on wealth that has reached the nisab and been held for a full lunar year. Calculating it is mostly a matter of listing what you own and what you owe on one date each year.
Step 1: Choose your zakat date
Pick a date in the Islamic calendar when your wealth first reached nisab, or a fixed date you use every year, such as 1 Ramadan. Calculate on the same date each year.
Step 2: List your zakatable assets
| Asset | How to value it |
|---|---|
| Cash at home and in bank accounts | Balance on your zakat date |
| Gold and silver | Market value by weight (see zakat on gold jewellery for jewellery in use) |
| Money owed to you that you expect to receive | Amount you expect to be paid |
| Shares and funds held to trade | Market value |
| Business stock | Market (sale) value; see zakat on business stock |
| Rental income saved | Count it as cash; the property itself is not zakatable |
Step 3: Deduct debts due now
Deduct debts that are payable now, such as an overdue bill, this month’s rent or instalment, or a credit card balance due. For long-term loans like a mortgage, many scholars allow only the instalments currently due to be deducted, not the full outstanding balance.
Step 4: Compare with nisab
Nisab is the value of 85 g of gold or 595 g of silver on your zakat date. Multiply the grams by today’s price per gram. If your net wealth is below nisab, no zakat is due. See nisab: gold or silver?
Step 5: Multiply by 2.5%
If your net wealth is at or above nisab, zakat is 2.5% of it.
Worked example
| AED | |
|---|---|
| Bank savings | 80,000 |
| Cash at home | 3,000 |
| Gold coins (market value) | 22,000 |
| Loan to a friend, expected to be repaid | 5,000 |
| Total assets | 110,000 |
| Less: credit card bill due | (4,000) |
| Less: rent due this month | (6,000) |
| Net zakatable wealth | 100,000 |
| Nisab (595 g silver at AED 3.20) | 1,904 |
| Zakat at 2.5% | 2,500 |
Run your own figures in the zakat calculator.
What is not zakatable
- Your home, car, furniture and personal belongings
- Tools and equipment used in your business
- Property you live in or rent out (the rent you save is counted as cash)
Where scholars differ
Points such as jewellery in personal use, pension funds and long-term investments are treated differently by different schools and scholars. When a large amount depends on one of these questions, ask a scholar you trust.
Frequently asked questions
Do I pay zakat on money I am saving for a house?
Yes, if it is part of your wealth on your zakat date and your total is above nisab.
What about money in a fixed deposit?
Fixed deposits are cash savings and are zakatable. Many scholars advise not counting any interest earned as part of your zakatable wealth, but giving it away separately.
Can I pay zakat in instalments during the year?
Many people pay in advance through the year. Calculate the total on your zakat date and pay any balance.