What is Zakat?
Zakat, often translated as "that which purifies," is one of the Five Pillars of Islam. It is an obligatory charitable contribution that financially able Muslims are required to pay to support the poor, needy, and other deserving categories. More than just a donation, Zakat is considered a spiritual duty that purifies one's wealth, fosters compassion, and promotes economic justice within the community. It is calculated annually at a rate of 2.5% on an individual's surplus wealth that has been held for one full lunar year (Hawl).
Understanding the Nisab Threshold
Before Zakat becomes obligatory, one's wealth must reach a minimum threshold known as the "Nisab." This threshold ensures that only those with a certain level of surplus wealth are required to pay. The Nisab is traditionally defined by the value of either gold or silver:
- Gold Nisab: The value of 85 grams (3 ounces) of pure gold.
- Silver Nisab: The value of 612.36 grams (21 ounces) of pure silver.
The value of gold and silver fluctuates daily. Many scholars recommend using the silver Nisab because it is typically a much lower threshold than the gold Nisab. This means more people are eligible to pay Zakat, which in turn provides greater benefit to those in need. Our calculator uses the current silver Nisab value for its calculations.
What Assets Are Included in Zakat?
Zakat is calculated on your productive, surplus wealth. This calculator covers the most common categories:
- Cash: Includes money in hand, in bank accounts, and any other easily accessible funds.
- Gold & Silver: The total value of any gold and silver you own, whether in jewelry, coins, or bullion.
- Investments: The market value of stocks, mutual funds, or other similar assets. Calculating Zakat on investments can be complex, and our Investment Calculator can help you track their value over time.
- Loans Given to Others (Receivables): Money that you have loaned to others and expect to be paid back.
From this total, you can deduct your immediate liabilities, such as outstanding bills or short-term debts you need to pay soon. For more detailed guidance on specific assets, resources like the Islamic Relief Zakat guide offer comprehensive explanations.