What is zakat and who must pay it?

Zakat is one of the Five Pillars of Islam — an obligatory annual purification of wealth. Every adult Muslim who owns wealth above the nisab threshold for a full lunar year (hawl) must pay zakat. The standard rate is 2.5% of net zakatable assets. Zakat is distributed to eight categories of recipients defined in the Quran, including the poor, the needy, and those in debt.

What is the nisab threshold?

The nisab is the minimum amount of wealth one must own before zakat becomes obligatory. It is traditionally defined as the value of 87.48 grams of gold or 612.36 grams of silver. Because gold and silver prices fluctuate, the nisab in dollar terms changes frequently. Many scholars use the gold nisab (approximately $8,000–$9,000 in 2026) as the default; the silver nisab (~$500) is much lower and means more Muslims qualify to pay zakat under that standard.

Which assets are zakatable?

Zakatable assets include: cash and bank balances, gold and silver (physical or in accounts), business inventory and trade goods, stocks and investment accounts (typically at market value), rental income (not the property itself), money owed to you that is expected to be repaid, and agricultural produce. Assets that are NOT zakatable include: your primary home, personal-use vehicles, furniture, clothing, jewelry other than gold and silver, and assets held for more than a year without trade intent.

Can debts be deducted from zakatable assets?

Yes — debts that are due within the year can be deducted from your total zakatable assets. For example, if you have $20,000 in savings and $8,000 in a credit card balance due this month, your net zakatable amount is $12,000. Long-term debts like a mortgage are more nuanced — most scholars say only the current year's installments may be deducted, not the total outstanding balance.

Do I pay zakat on stocks and investment accounts?

Generally yes. For stocks held for trading purposes (like an investment portfolio), most scholars say you pay zakat on the current market value of the shares. For stocks in a business where you are a shareholder, scholars differ — some say pay on the zakatable assets of the company proportional to your ownership. For 401(k) and IRA accounts, some scholars say zakat is due on accessible funds (traditional IRA, Roth IRA) but not on locked retirement funds until they become accessible.

What is the hawl (lunar year) requirement?

You must have owned wealth above the nisab for one complete lunar year (approximately 354 days) before zakat is due. The year typically begins the day your wealth first reaches the nisab. If your wealth drops below the nisab at any point during the year, the cycle resets. Most people pick one date per year (often Ramadan) to calculate and pay their zakat for simplicity, using whatever the balance is on that date.

How is gold zakat calculated differently from cash?

Gold is zakatable at 2.5% of its current market value once you own 87.48 grams or more (the gold nisab). Gold jewelry used daily by women is a disputed item — some scholars exempt it, others do not. Silver follows the same logic at 612.36 grams. If you use the gold nisab as your threshold, any gold you own also counts toward meeting that threshold. In this calculator, enter the current dollar value of your gold and silver holdings.

Zakat Calculator — 2.5% Due on Wealth

Calculates zakat due (2.5%) on total zakatable assets above the nisab — cash, gold, investments, business assets, and receivables minus debts.

How to Use This Zakat Calculator

This zakat calculator computes your total zakatable assets, compares them to the nisab threshold, and shows your zakat due at 2.5%. Enter the dollar value of each zakatable asset category — cash, gold, silver, business assets, investments, and money owed to you. Enter any outstanding debts that are due within the current lunar year. The calculator totals your zakatable assets, subtracts debts, and compares the result to the nisab threshold. If your net zakatable wealth is above the nisab, 2.5% is your zakat due.

You can choose between the gold nisab (87.48 grams, approximately $8,311 in 2026) or the silver nisab (612.36 grams, approximately $588). The gold nisab is more commonly used; the silver nisab is lower and results in more Muslims meeting the threshold.

What Is Zakat?

Zakat is one of the Five Pillars of Islam — an obligatory annual contribution of a portion of accumulated wealth to those in need. The rate is 2.5% of net zakatable assets. Zakat serves as a mechanism for wealth redistribution, helping the poor, debtors, travelers in need, and others defined in the Quran (Surah 9:60).

Unlike a voluntary charity (sadaqah), zakat is a religious obligation for every adult Muslim who is sane, free, and has owned wealth above the nisab for a full lunar year (called the hawl). Zakat is calculated and paid once per year, often during Ramadan though any date is valid as long as the hawl is complete.

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The Nisab Threshold Explained

The nisab is the minimum wealth level below which no zakat is owed. It was established by the Prophet Muhammad (peace be upon him) as the equivalent of 87.48 grams of gold or 612.36 grams of silver. Because these metals have different market prices today, the two nisab values diverge significantly:

Gold nisab: 87.48g × ~$95/g ≈ $8,311 (2026 estimate)
Silver nisab: 612.36g × ~$0.96/g ≈ $588 (2026 estimate)

The gold nisab price is approximate and changes with market prices. Check a current gold price source before your final calculation. Using the silver nisab means a significantly lower threshold and more people owe zakat — scholars differ on which is more appropriate. Many contemporary Islamic finance organizations recommend the gold nisab for most Muslims in high-income countries.

Zakatable vs. Non-Zakatable Assets

Not all wealth is subject to zakat. Zakatable assets include:

Cash and bank balances — checking, savings, money market accounts
Gold and silver — physical coins, bars, or jewelry (gold/silver ornaments held as investment)
Business inventory — goods held for trade at their market value
Stocks and investment accounts — typically at current market value
Receivables — money genuinely expected to be repaid

Non-zakatable assets include your primary residence, personal-use vehicles, household furniture, clothing, and tools of your trade. Long-term productive assets used in a business (machinery, equipment, the building) are generally not zakatable — only the trade goods and liquid assets are.

Deducting Debts From Zakatable Assets

Short-term debts due within the current year may be deducted from your zakatable total. This includes credit card balances, personal loans due soon, and the current year's installment on longer-term obligations. Most scholars permit deducting only the portion of a mortgage due in the current year — not the entire outstanding balance — from zakatable assets.

After deducting eligible debts, if your net zakatable wealth equals or exceeds the nisab and you have held it for a full lunar year, 2.5% of the net amount is your zakat. For help estimating your annual income and tax obligations, see the paycheck calculator and income tax calculator.

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Zakat on Retirement Accounts and Investments

Scholars differ on 401(k), IRA, and pension zakat obligations. Common positions include:

Accessible accounts (Roth IRA, traditional IRA after 59½): Zakat is owed on the current balance since you can withdraw funds.
Locked employer pension / 401(k) with early-withdrawal penalty: Many scholars say no zakat is due until the funds become accessible. Others say pay on what you would receive after penalty.
Stock portfolios: Pay 2.5% on the current market value of the shares, or on the zakatable underlying assets if you can determine them (for equity in a business).

Consult a qualified Islamic scholar for rulings specific to your situation, especially for complex investment structures.

How Zakat Is Distributed

Zakat must be distributed to specific recipients defined in Surah 9:60 of the Quran: the poor (fuqara), the needy (masakin), zakat administrators, new Muslims whose hearts are to be reconciled, people in bondage, debtors, those in the way of Allah, and travelers in need. You may pay zakat directly to eligible individuals you know, or through a trusted Islamic charity or zakat organization that distributes on your behalf.

Important Disclaimer

This calculator provides a general estimate based on widely accepted zakat principles. Gold and silver prices used for nisab calculations are approximate and should be verified against current market rates. Rulings on specific asset categories (retirement accounts, mortgaged property, stocks) vary among scholars. This tool is not a fatwa (religious ruling). Consult a qualified Islamic scholar or a certified zakat advisor for guidance specific to your situation.

Zakat Calculator