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الزَّكَاةُ

How to Calculate Zakat — A Step-by-Step Guide

Everything you need to know about Zakat: what it is, who must pay it, how to calculate it on different assets, and the Nisab threshold for 2026.

What is Zakat?

Zakat is the third pillar of Islam. It is an obligatory form of charity that requires every Muslim whose wealth exceeds a minimum threshold (Nisab) to give 2.5% of their qualifying wealth annually to those in need.

Allah says in the Quran: "Take from their wealth a charity to purify and sanctify them" (Quran 9:103). Zakat purifies wealth, helps the poor and strengthens the Muslim community.

The Zakat Formula

Zakat = Total Zakatable Wealth × 2.5%
Your zakatable wealth is the total of: cash savings + gold + silver + investments + business inventory + cryptocurrency − debts due immediately.

Step 1: Check if You Meet the Nisab

The Nisab is the minimum amount of wealth you must possess for Zakat to be obligatory. There are two measures:

Nisab StandardWeightApprox. Value (2026)
Gold Nisab85 grams of gold~€7,200 / $7,800 / £6,100
Silver Nisab595 grams of silver~€550 / $600 / £480

Most scholars recommend using the silver Nisab as it benefits more recipients. If your total wealth exceeds either threshold and you have held it for one full lunar year (hawl), Zakat is due.

Step 2: Calculate Your Zakatable Wealth

Add up all qualifying assets:

Asset TypeZakatable?Notes
Cash savings✅ YesBank accounts, cash at home
Gold & silver✅ YesJewellery (varies by madhab), bars, coins
Stocks & investments✅ YesMarket value at time of calculation
Cryptocurrency✅ YesBitcoin, Ethereum, stablecoins etc.
Business inventory✅ YesGoods held for sale
Rental income✅ YesAccumulated savings from rent
Primary home❌ NoPersonal-use assets are exempt
Personal car❌ NoPersonal-use assets are exempt
Daily clothing❌ NoPersonal-use assets are exempt

Step 3: Subtract Immediate Debts

Deduct any debts or liabilities that are due for payment now (e.g. rent due, bills, credit card balance). Long-term debts like a mortgage are generally not deducted in full — only the upcoming instalment.

Step 4: Apply the 2.5% Rate

Example: You have €15,000 in savings, €2,000 in gold jewellery, and €1,000 in crypto. You owe €500 on a credit card.

Zakatable wealth = €15,000 + €2,000 + €1,000 − €500 = €17,500
Zakat due = €17,500 × 2.5% = €437.50

💰 Use Our Free Zakat Calculator

Enter your assets and get an instant calculation with Nisab check included.

Calculate Your Zakat →

Special Cases

Zakat on Gold Jewellery

There is a scholarly difference on this. The Hanafi madhab considers gold jewellery zakatable, while the Shafi'i and Hanbali madhabs generally exempt jewellery worn regularly. If in doubt, paying Zakat on jewellery is the safer option.

Zakat al-Fitr

This is a separate obligation paid before Eid al-Fitr prayer at the end of Ramadan. It is approximately 2.5–3 kg of staple food per person in your household (roughly €7–15 per person). It is obligatory on every Muslim regardless of Nisab.

Who Receives Zakat?

The Quran specifies 8 categories of recipients (Quran 9:60): the poor (fuqara), the needy (masakin), Zakat collectors, those whose hearts are to be reconciled, freeing captives, those in debt, in the cause of Allah, and travellers in need.

Frequently Asked Questions

How much Zakat do I need to pay?
Zakat is 2.5% of your total zakatable wealth that has been above the Nisab threshold for one full lunar year. For example, if you have £10,000 in savings above Nisab for a year, your Zakat is £250.
What is the Nisab for Zakat in 2026?
The Nisab is equivalent to 85 grams of gold (~€7,200) or 595 grams of silver (~€550). If your wealth exceeds either threshold for one lunar year, Zakat is obligatory.
Do I pay Zakat on my house or car?
No. Personal-use assets — your home, car, clothing and furniture — are exempt. Zakat applies only to surplus wealth: savings, gold, silver, investments, crypto and business inventory.
Is Zakat due on cryptocurrency?
Yes. Most contemporary scholars agree that cryptocurrency is zakatable wealth similar to cash. If you hold crypto above the Nisab for one lunar year, you owe 2.5% Zakat on its value.

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