What Is Zakat and How to Calculate It
Zakat is one of the five pillars of Islam — an obligatory annual purification of wealth. Here is what it means, who must pay, and how to calculate it.
What is Zakat?
Zakat is a mandatory charity due each lunar year on the wealth of every eligible Muslim whose savings exceed a minimum threshold (the nisab). The standard rate is 2.5% of qualifying wealth. It purifies wealth and supports those in need.
The nisab threshold
You owe Zakat only if your net wealth stays above the nisab — the value of 85 grams of gold (or 595 grams of silver) — for a full lunar year (the hawl). Below the nisab, no Zakat is due.
How to calculate it
Add your zakatable assets — cash, bank savings, gold and silver, business goods, and investments — then subtract immediate debts. If the net amount is above the nisab and held for a lunar year, Zakat = 2.5% of that net wealth.