How Zakat is calculated
Updated 30 October 2026 · 8 minute read
Zakat is the annual obligatory charity in Islam: a fixed share of wealth that has been held for a full lunar year, given to those entitled to receive it. For most forms of wealth the share is one fortieth, or 2.5%. The calculation itself is short — add what you own, subtract what you owe, compare the result with the nisab threshold, and take 2.5% if you are above it. The difficulty is deciding what belongs in each list.
The two conditions: nisab and hawl
Nisab is the minimum amount of wealth that makes Zakat due. If your net zakatable wealth is below it, no Zakat is due on that wealth for that year. Hawl is the passing of one complete lunar year (about 354 days) while your wealth remains at or above the nisab. Wealth that rises above the nisab and then falls below it during the year breaks the hawl in the view of many scholars.
What counts as zakatable wealth
The four categories below cover most households and small businesses:
| Category | What to include |
|---|---|
| Cash | Money at home, in your wallet, in current and savings accounts, and digital wallets |
| Precious metals | Gold and silver in any form — coins, bars, jewellery — valued at today’s price |
| Business assets | Stock for sale at its current market value, plus business cash and receivables you expect to collect |
| Investments | Shares held for trading, and the cash value of investments you can liquidate |
Things you use rather than own for resale — your house, your car, your furniture, tools of your trade — are generally not zakatable. A rental property is usually treated through its income and, in some views, its resale value; this is one of the points where scholars differ, so it is worth asking a scholar about your own case.
What you subtract
Debts that are due now, and the portion of longer debts that falls due within the year, are commonly subtracted from your assets. A mortgage payment due next month is a debt; the entire remaining thirty years of a home loan is treated differently by different scholars. Do not subtract ordinary monthly living expenses — food, rent and bills you will pay from income are not debts in this sense.
Gold nisab versus silver nisab
The nisab can be measured in gold or in silver, and the two give very different thresholds:
- Gold: 87.48 grams (7.5 tola)
- Silver: 612.36 grams (52.5 tola)
At a gold price of PKR 25,000 per gram, the gold nisab is about PKR 2,187,000. At a silver price of PKR 300 per gram, the silver nisab is about PKR 183,708. Because silver is far cheaper per gram, its nisab is much lower and many more people cross it. Many scholars recommend the silver nisab for people whose wealth is modest, because it is more beneficial to the poor; others use gold. Our calculator lets you pick either and shows the threshold it used.
A worked example
Suppose you have PKR 400,000 in a savings account, PKR 50,000 cash at home, gold jewellery weighing 20 grams, and a credit-card balance of PKR 60,000 due this month. Gold is PKR 25,000 per gram.
- Cash and bank: 400,000 + 50,000 = 450,000
- Gold value: 20 g × 25,000 = 500,000
- Total assets: 950,000
- Minus debt: 950,000 − 60,000 = net 890,000
- Silver nisab at PKR 300/g: 612.36 × 300 = 183,708 — net wealth is above it
- Zakat due: 890,000 × 2.5% = PKR 22,250
If the same person used the gold nisab of PKR 2,187,000, net wealth would be below the threshold and no Zakat would be due on this total. The difference is not a mistake in arithmetic — it is a difference in method, and it is exactly why the calculator asks you to choose.
Mistakes that change the answer
- Valuing gold at the purchase price. Use today’s market value of the metal, not what you paid years ago.
- Forgetting receivables. Money a customer owes you and will pay is part of your wealth.
- Subtracting the whole mortgage. Only the amounts due in the period are clearly deductible in most views.
- Paying on gross instead of net. Debts due now are subtracted before the 2.5% is applied.
- Using a price from last week. Metal prices move; update them on the day you calculate.