Zakat (almsgiving) is one of the Five Pillars of Islam, which are the foundational acts of worship and practice in a Muslim's life. It involves giving a portion of one's wealth to those in need, typically 2.5 per cent of savings, investments, and other accumulated assets that have been in the possession of the individual for a full lunar year.
Nisab is the minimum amount of wealth a Muslim must possess before being liable to pay Zakat. It is based on the value of 87.48 grams of gold or 612.36 grams of silver. Since the value of gold and silver fluctuates, the Nisab threshold changes accordingly.
Zakat is typically paid once a year, after a full lunar year (Hawl) has passed on the wealth that exceeds the Nisab threshold. The payment date is based on the individual’s specific financial cycle. Many Muslims choose to pay Zakat during Ramadan due to its spiritual significance, but it can be paid at any time once the obligation is met.
When it comes to gold, Zakat is calculated at 2.5 per cent of the total weight of gold you own that exceeds the Nisab. To figure out how much Zakat is due, you need to check the current market price of gold.
The total value of the gold is then multiplied by 2.5 per cent to calculate the due amount. There’s some debate over whether Zakat should be paid on gold jewelry, but many scholars agree that unused or excess gold should be included.
Zakat on cash is calculated by adding up all the cash a person owns, including money in hand, bank accounts, and any liquid assets such as savings, investments, or business capital.
If the total cash value meets or exceeds the Nisab threshold (based on the gold or silver equivalent), 2.5 per cent of that amount must be given as Zakat.
Various assets are subject to Zakat, including gold, silver, cash, savings, investments, business inventory, and agricultural produce. Personal belongings such as clothing, household furniture, and one’s primary residence are exempt. The key requirement is that the assets must exceed the Nisab threshold and be held for a full lunar year.
Adult Muslims with wealth exceeding the Nisab threshold for a full lunar year are required to give Zakat. Those with savings, investments, or other qualifying assets meeting the criteria have a responsibility to contribute. Beyond fulfilling a religious duty, Zakat serves as a means to support society and assist those in need.
There are eight categories of beneficiaries eligible to receive Zakat, as stated in the Holy Quran: The poor, the needy, those in debt, travelers in need, those working to collect and distribute Zakat, new Muslims, those striving in the cause of Allah, and slaves seeking freedom. The primary goal is to assist those facing financial hardship and promote social equity within the Muslim community.
This Zakat Calculator is provided as a general tool to assist users in estimating their Zakat obligations. The calculations are approximate and for informational purposes only. Users are advised to consult a qualified Islamic scholar or financial advisor for precise Zakat calculations.