Zakat calculation
How to calculate zakat: a step by step method
Five steps, one figure. Work out exactly what you owe without guesswork.
In short
To calculate zakat, add every zakatable asset you own, subtract debts that are due, check the total against nisab, then pay 2.5 per cent of what remains. On net zakatable wealth of 10,000 pounds, zakat due is 250 pounds.
- Rate: 2.5 per cent, or divide your total by 40
- Due once per lunar year on your zakat date
- Deduct only debts that are currently payable
- Value assets at what they are worth today
Step 1: pick your zakat date
Your zakat date is the anniversary of the day your wealth first reached nisab. Many people choose a date in Ramadan so it is simple to remember and the reward of giving is multiplied.
Step 2: total your zakatable assets
Value everything at what it is worth on your zakat date, not what you paid for it.
- Cash, current accounts and savings
- Gold and silver, including jewellery
- Shares, funds, crypto and accessible pensions
- Business stock and raw materials
- Rental income received and held
- Loans you have made and expect to be repaid
Step 3: subtract what you owe
Deduct debts that are due now: outstanding bills, overdue credit card balances, this month's rent or mortgage payment, and money you owe to family. Do not deduct the full outstanding balance of a long term mortgage, only the instalments currently due.
Step 4 and 5: check nisab, then pay 2.5 per cent
If the net figure is at or above nisab, multiply it by 0.025. A quick shortcut is to divide by 40. Pay the amount to eligible recipients, or through a charity that keeps zakat in a restricted fund.
Frequently asked questions
Is zakat 2.5 per cent of income or of savings?
Of wealth held, not income earned. You pay on what you still hold on your zakat date after a lunar year, not on your salary as it arrives.
Can I pay zakat in instalments?
Yes. Zakat can be paid across the year in advance or settled in parts once due, as long as the full amount is discharged.
Do I pay zakat on my house?
No, not on the home you live in. Property bought to resell is zakatable at market value, and rental property is zakatable on the income you have saved rather than the building itself.