Zakat: definition, importance and guide
Zakat is a mandatory alms in Islam. It purifies wealth and strengthens social solidarity.
Zakat becomes due when the Nisab (minimum threshold) is reached and held for one lunar year (hawl).
The common rate for financial assets (cash, gold, silver, stocks and business goods) is 2.5%. Agriculture and livestock have specific rates and thresholds.
Below you will find conditions, covered assets, rates, worked examples, Nisab references and beneficiaries (Qur’an 9:60).
Conditions of obligation
- Nisab: minimum threshold of wealth.
- Hawl: one lunar year passes on the wealth.
- Ownership: full and productive ownership.
- Growth: assets capable of growth or return.
Types of assets
The calculator includes common categories for a simple estimate.
| Category | Examples | Rule |
|---|---|---|
| Cash & savings | Bank accounts, wallets | 2.5% if above Nisab |
| Gold & Silver | Jewelry (non-personal), bars, coins | 2.5% of market value |
| Stocks / investments | Shares, funds | 2.5% on net value |
| Business goods | Inventory, business cash | 2.5% on trade goods |
| Receivables | Loans you gave, dues | 2.5% if collectible |
| Agriculture | Harvest value | 10% rain-fed / 5% irrigated |
| Livestock | Camels, cattle, sheep (simplified) | Varies; here a simplified 2.5% proxy |
Rates and Nisab references
| Type | Rate | Notes |
|---|---|---|
| Financial assets | 2.5% | Cash, gold, silver, stocks, business goods |
| Agriculture | 10% / 5% | 10% if rain-fed, 5% if irrigated with expenses |
| Livestock | var. | Species-specific thresholds; simplified here |
| Nisab — gold | 85 g | 85 grams × gold price/gram |
| Nisab — silver | 595 g | 595 grams × silver price/gram |
Worked examples
Employee: cash 5,000, gold 1,500, debts 200 → net 6,300 above Nisab; zakat (financial) = 157.50.
Merchant: inventory 10,000, cash 2,000, receivables 1,000, debts 3,000 → base 13,000; net 10,000; zakat = 250.
Investor: stocks 8,000, cash 1,000, gold 1,000 → base 10,000; zakat = 250 (if above Nisab).
Beneficiaries (Qur’an 9:60)
- The poor (al‑fuqara) and the needy (al‑masakin)
- Zakat administrators
- Those whose hearts are to be reconciled
- Freeing captives
- Debtors
- In the cause of Allah
- The wayfarer
Visualizing before/after Zakat
Use the donut to visualize the split by category. Track wealth before/after zakat to plan giving and cashflow.