Zakat: understanding and calculating your zakat al-mal step by step

Zakat, a right of the poor over our wealth

The word الزَّكَاة (zakat) means both “purification” and “growth”. It refers to the obligatory charity that a Muslim who can afford it pays each year on his savings. It is not an optional gift: it is one of the five pillars of Islam.

The Quran explains what zakat produces in the one who gives it:

The Prophet ﷺ also summed up its movement when he sent his Companion Mu‘adh ibn Jabal to Yemen:

This article is about zakat al-mal, the zakat on wealth. It is different from zakat al-fitr, the small charity paid by each person at the end of Ramadan (see Fasting Ramadan).

The two thresholds: the nisab and the lunar year

Zakat al-mal is due only if two conditions are met.

The nisab (النِّصَاب, the minimum threshold). It corresponds to 20 mithqal of gold, i.e. about 85 grams of pure gold, or to 200 dirhams of silver, i.e. about 595 grams of pure silver. The Prophet ﷺ specified that there is no zakat on less than five awaq of silver, that is, 200 dirhams (reported by al-Bukhari and Muslim). To know the value of the nisab in euros, multiply this weight by the price per gram on the day of the calculation.

The lunar year (الحَوْل hawl). The savings must remain at the level of the nisab for a full lunar year, about 354 days. In practice, many people choose a fixed date, for example the first day of Ramadan, and do their accounts each year on that date.

Which assets should be counted?

Zakat applies to wealth meant to be saved or to make a profit, not to what you use to live.

Count:

• cash, current accounts and savings (savings books, term accounts);
• gold and silver held as investment (bars, coins);
• the merchandise of a business, at its selling value;
• sums lent that you are sure to recover;
• financial investments, according to terms that vary from one school to another.

Do not count:

• your main residence;
• the car, furniture, clothes and objects of personal use;
• the tools and machines needed for your work.

Calculating your zakat step by step

A worked example

Let us take a fictional household, with a hypothetical price of €100 per gram of gold. The gold-based nisab is then worth 85 × 100 = €8,500. (Always check the real price on the day of your calculation.)

• Current accounts and savings books: €9,400
• Cash at home: €300
• Gold coins held as investment: 20 g × €100 = €2,000
• Sum lent to a relative, who repays without difficulty: €500
• Total assets: €12,200
• Debts to be paid immediately: €1,200
• Amount subject to zakat: 12,200 − 1,200 = €11,000

The €11,000 exceeds the nisab of €8,500, and this level of savings was kept all year. The zakat is therefore 11,000 × 2.5% = €275. This household has nothing to count for its house, its car or the jewelry worn daily, if it follows the majority opinion on the latter.

To whom should you give your zakat?

The Quran itself lists the recipients, which shows the importance of this pillar:

These eight categories are: the poor, the needy, those who collect and distribute zakat, those whose hearts are to be reconciled, the freeing of captives, those heavily in debt, the cause of Allah, and the traveler in difficulty. In practice, the largest share goes to people in need, near or far.

A few landmarks:

• you do not pay your zakat to those you are already responsible for, such as your parents, your children or your wife;
• a brother, a sister or a cousin in need can receive it, and it is even a beautiful way of keeping family ties;
• going through an association is possible, provided that it clearly distinguishes zakat from other donations and redistributes it to the prescribed categories;
• discretion is preferable, to preserve the dignity of the one who receives.

Giving does not make you lose:

Practical questions

Can you pay in several installments? It is recommended to pay zakat as soon as it is due. Some prefer to advance it and spread it over the year, which many scholars permit.

Must you tell the recipient? No: it is enough to have the intention yourself that this gift is your zakat. There is no need to embarrass someone by telling them.

What if I forgot some years? Unpaid zakat remains due. You recalculate the past years as best you can, then settle gradually, with the help of a qualified person if necessary.

To go further

• Read the verse on the recipients: Surah at-Tawba, verse 60.
• Prepare for the end of Ramadan: Fasting Ramadan, a practical guide.
• The chapters on generosity in Riyad as-Salihin.
• Understanding our references: Methodology and sources.