How to Calculate Zakat Step by Step — Complete Guide 2026
What Is Zakat?
Zakat is the third pillar of Islam. It is a fixed percentage of wealth that has reached the Nisab threshold and been held for one lunar year, given to those in need.
Understanding how to calculate Zakat is essential for every Muslim who has savings, investments, or assets.
Conditions for Zakat Obligation
- ✅ Islam — Zakat is obligatory upon Muslims
- ✅ Freedom — not required from slaves
- ✅ Adulthood and sanity
- ✅ Reaching the Nisab — minimum wealth threshold
- ✅ One lunar year (Hawl) has passed
- ✅ Complete ownership of the wealth
What Is the Nisab?
The Nisab is the minimum amount of wealth that makes Zakat obligatory:
- Gold Nisab: 85 grams of 24-carat gold
- Silver Nisab: 595 grams of pure silver
Zakat Rate
The Zakat rate on cash wealth is 2.5% (one quarter of one-tenth).
How to Calculate Zakat Step by Step
- Determine your Hawl start date
- Add up all your wealth — cash, gold, stocks, rental properties, recoverable debts
- Subtract short-term debts
- Compare to Nisab — if equal or more, Zakat is due
- Multiply by 2.5% — this is your Zakat amount
Practical Example
Ahmed has: $5,000 checking + $3,000 savings + $2,000 stocks + $4,000 gold + $2,400 rental - $1,000 debt = $15,400
Ahmed's Zakat = $15,400 × 2.5% = $385
Who Receives Zakat?
Eight categories defined in the Quran: the poor, the needy, Zakat administrators, those whose hearts are to be reconciled, slaves, debtors, in the cause of Allah, and the wayfarer.
Try Our Zakat Calculator
Use our free Zakat Calculator to calculate your Zakat accurately in seconds. Also see our Inheritance Calculator for Islamic estate planning.
Zakat on Gold and Silver Step by Step
Gold is zakatable when its pure weight reaches 85 grams and stays at or above that level for one lunar year. Silver becomes zakatable at 595 grams of pure metal. For stored or investment gold and silver, include the full pure weight on your Hawl date.
Convert lower-purity gold to its 24-carat equivalent before comparing with Nisab. A 22-carat ornament is 22 ÷ 24 = 0.9167 pure gold by weight.
Example: You hold 100 grams of 22-carat gold on your Hawl date. Pure gold weight = 100 × 0.9167 = 91.67 grams. This is above the 85-gram gold Nisab. If the market price is $75 per gram, zakatable value = 91.67 × $75 = $6,875.25. Zakat due = $6,875.25 × 2.5% = $171.88.
Use the Gold Calculator to convert grams, tola, or ounces into a current cash value before you apply the 2.5% Zakat rate.
Zakat on Bank Savings and Cash
Cash in a checking account, savings account, fixed deposit, e-wallet, or at home is added together. Deduct only debts that are due now or within the Zakat year, such as a credit card balance you must pay this month. Long-term loans are not deducted in full; only the portion due before your Hawl date is subtracted by many scholars.
Worked example: A person has $4,200 in checking, $7,800 in savings, and $1,000 in cash. Total liquid cash = $4,200 + $7,800 + $1,000 = $13,000. A credit card debt of $1,200 is due within the year. Net zakatable cash = $13,000 − $1,200 = $11,800. If $11,800 is above the Nisab threshold, Zakat = $11,800 × 2.5% = $295.
Convert foreign currency balances into your home currency at the Hawl date exchange rate, then include the converted amount. The Currency Converter gives the current rate for that step. Enter the final net amount into the Zakat Calculator to compute 2.5% exactly.
Zakat on Stocks, Mutual Funds and Investments
If you buy shares to trade, treat their market value on your Hawl date like trading goods. Add the cash balance in the brokerage account and any dividends already received and still in your possession. Subtract any brokerage debt due within the year.
Example: You own 100 shares priced at $30 per share. Share value = 100 × $30 = $3,000. You also hold $200 in received dividends and $150 in the brokerage cash account. Total zakatable investment value = $3,000 + $200 + $150 = $3,350. Debt due within the year is $0. Zakat = $3,350 × 2.5% = $83.75.
For shares held mainly for long-term dividends, a practical method is to find the company's zakatable assets from its balance sheet and multiply your ownership percentage by that amount. If that data is unavailable, many individuals treat the full market value as zakatable. Use the Zakat Calculator after you total each investment class.
Related tools and guides
- Zakat Calculator — computes 2.5% on cash, gold, stocks, and debts
- Gold Calculator — converts gold weight into current cash value
- Currency Converter — converts foreign savings before Zakat calculation
- Zakat al-Fitr Guide 2026 — explains the fixed per-person Zakat al-Fitr amount