How to Calculate Your Zakat: A Step-by-Step Guide

Zakat is one of the Five Pillars of Islam — a fixed, annual obligation to give a portion of your wealth to those in need. If you have reached the nisab threshold and a full lunar year has passed, you owe zakat. The calculation itself is straightforward once you understand which assets count and what rate applies. Here is how to work it out step by step.

What Is Zakat Owed On?

Zakat applies to certain types of wealth held for a full lunar year. The main categories are:

Cash and bank savings. Every dollar in your accounts counts toward your zakat obligation.

Gold and silver. This includes jewellery worn or stored, as well as bullion. Zakat on precious metals is calculated by weight and current market value. For detailed guidance see our guide to Zakat on savings, gold and investments.

Investments and stocks. Shares, bonds, and investment funds are included at current market value.

Business inventory. Goods held for sale are subject to zakat at their current market value.

Items that do not count: your primary residence, car, clothing, furniture, and tools of your trade.

The Nisab Threshold

Before zakat is due, your total qualifying wealth must reach the nisab — the minimum threshold at which the obligation applies. The nisab is pegged to 87.48g of gold or 612.36g of silver; scholars generally recommend the silver nisab as it is the lower figure and brings more people within the obligation.

The nisab changes with the gold and silver market. Check the current figure before you calculate using our Zakat Calculator, or for a full explanation of how it works see What Is Nisab? The Zakat Threshold Explained.

If your total wealth falls below nisab, you owe no zakat that year. If it is above nisab and has been for a full lunar year, you proceed to calculate.

The 2.5% Rate and the Hawl Year

The zakat rate is fixed at 2.5% of your qualifying wealth — not of your income, but of the total you hold.

One critical condition: your wealth must have been above the nisab continuously for a full hawl (lunar year) of 354–355 days. If your wealth dips below the nisab at any point, the hawl resets. Many people choose to calculate and pay zakat during Ramadan each year, which is permissible.

A Worked Example

Say your qualifying assets on calculation day are:

• Cash savings: $15,000
• Stocks and investments: $5,000
• Gold jewellery (at market value): $3,500
• Business inventory: $2,000

Total qualifying wealth: $25,500

If $25,500 exceeds the current nisab, and this wealth has been above the nisab for a full lunar year:

Zakat due: $25,500 × 2.5% = $637.50

You may deduct genuine debts owed to others before calculating — scholars differ on which liabilities count, so consult your local scholar for specific cases.

Calculate It Automatically

If working through the categories feels complex, our Zakat Calculator does it for you. Enter your cash, gold, investments and business assets — and it gives you the figure in seconds, with no registration required.

Once you know your zakat, the next step is giving it to those who are genuinely eligible under Islamic law. We are a US 501(c)(3) (Tax ID: 87-2410117), and our scholar-reviewed Zakat Policy ensures funds reach only those in the eight categories named in Qur'an 9:60.

SOURCES
Qur'an 9:60 — the eight categories of zakat recipients.
Sunan Abi Dawud 1573 — on items subject to zakat.
Muwatta Malik 1:17:53 — on calculating zakat on wealth.
What Is Nisab? — Human Appeal
Zakat on Savings, Gold and Investments — Human Appeal

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