What is Zakat and why does it have special rules?
Zakat is the third pillar of Islam — an obligatory payment on wealth that reaches a specific threshold known as the Nisab, held for a full lunar (Hijri) year, known as the Hawl. Its purpose is to purify wealth and support social solidarity, with fixed categories of recipients defined in Islamic law.
Conditions for Zakat to be obligatory
- Reaching the Nisab: Owning wealth equal to or exceeding the value of 85 grams of 24k gold.
- Passing of the Hawl: The wealth must remain at or above the Nisab for a full lunar year, except for crops, fruits, and extracted minerals, which are due at harvest or extraction without the Hawl condition.
- Full ownership: The wealth must be fully owned by the Zakat payer, with no rights of others attached to it.
- Surplus over basic needs: Some scholars require the wealth to be surplus to essential debts and expenses.
Wealth subject to Zakat
Zakat is due on specific categories of wealth, most notably:
- Cash: Whether in hand, bank accounts, or e-wallets.
- Gold and silver: Whether as bullion or jewelry, with some difference of opinion on jewelry used for personal adornment. What counts is the pure gold content: a gram of 21k gold contains 21 parts of 24 pure gold, so the calculator converts each karat to its 24k equivalent first.
- Trade goods: Anything prepared for sale with the intention of profit, including goods, products, or real estate held for trade.
- Stocks and investments: Depending on the nature of the company, usually valued at current market price when Zakat becomes due.
- Expected receivables: Money owed to you by others, if collection is reasonably expected.
How is the Zakat rate calculated?
The fixed rate for cash, gold, silver, and trade goods is 2.5% of net zakatable wealth (after deducting debts due immediately). Zakat on crops and fruits varies by irrigation method, and Zakat on minerals and buried treasure has different rulings, outside the scope of this calculator.
Frequently Asked Questions
My gold is 21k or 18k. Should I enter its weight in the 24k field?
No, that would overstate your Zakat (by about 14% for 21k and about 33% for 18k). Enter the weight as-is under its karat; the calculator works out the pure gold content (weight × karat ÷ 24) and multiplies it by the 24k price per gram.
Why are there two options for the Nisab basis?
The Nisab is twenty mithqals of gold, about 85 grams, and jurists differ on which karat counts. The majority (Shafi'i and Hanbali scholars, and by implication the Maliki view) count pure gold, so the Nisab is 85 g of 24k (about 97 g of 21k). Egypt's Dar al-Ifta uses the value of 85 g of 21k gold, a lower threshold, so Zakat becomes due on smaller amounts. Both are recognized views: choose the one you follow or that your local fatwa authority uses, and enter the price per gram of the karat that option asks for.
Is Zakat due on gold jewelry I wear for personal use?
This is a matter of scholarly difference; some scholars hold that Zakat is not due on jewelry intended for personal use, while others hold it is due once it reaches the Nisab. It's best to consult a trusted fatwa authority for the prevailing view in your school of thought.
What if my wealth didn't reach the Nisab all year but suddenly increased before it ended?
The general rule is that the Hawl begins from the first day you owned wealth at the Nisab level and continues (or resumes) until it ends. If your wealth dropped below the Nisab during the year and later returned to it, a new Hawl may begin. Consult a fatwa authority for your specific situation.
Should I deduct monthly loan installments from my total wealth?
Debts due immediately or within the current year (such as this month's installment) are typically deducted from total wealth before calculating Zakat, while long-term debts not yet due are subject to scholarly difference in how they are treated.
Exactly when does the Hawl begin?
The Hawl begins on the first day you owned wealth reaching the Nisab. It's recommended to record this date (in the Hijri calendar) when you first reach the Nisab, to accurately track your annual Zakat due date.