How to Calculate Zakat
Zakat is the third Pillar of Islam and is one of the most important and commendable acts that any adult Muslim could hope to perform. The word Zakat itself has the meaning of purification and increase. Allah has made it obligatory on every sane, adult Muslim who has complete ownership of the nisab (see below) to help those less fortunate, as is mentioned in the Qur'anic verse below:
Take [O Prophet (saw)] from their wealth a charity in order to cleanse and purify them..
At Muslim Hands, most of our projects are Zakat eligible, and with your generosity, we will work to assist those who are most in need. Calculating the exact amount of Zakat owed can be a difficult task, especially when you come to consider any assets such as property and/or business shares. At Muslim Hands, we offer our Zakat calculator to help; simply input all your assets and it will automatically calculate the amount owed.
Zakat Nisab
In order to qualify to pay Zakat, you must first meet the minimum Zakat nisab (threshold). Your expendable wealth should be at least the value of 87.48 grams of gold or 612.36 grams of silver, and your wealth should have remained above the nisab value for one Islamic (lunar) year, referred to as Hawl. Many Muslims opt to pay their Zakat during the Blessed Month of Ramadan, but Zakat can be paid at any time of the year.
As the value of gold and silver constantly change, so too does the value of nisab. This is why we showcase the live nisab value on our Zakat calculator.
WHAT IS ZAKAT DUE ON?
Zakat is due on any personal expendable wealth owned by a sane adult Muslim, including any wealth that is tied up in business assets and property. In these cases, the value of such assets is included and added to the value of any money in the bank and cash at home.
Here is the complete list of what Zakat is due on:
- Gold and silver (ornaments or jewellery)
- Cash held at home or in bank accounts
- Pensions
- Property owned for investment purposes
- Stocks and shares owned directly or through investment funds
- Money lent to others
- Business stock in trade and merchandise
- Agricultural produce
Any debt that is owed, however, is to be subtracted from the total wealth. Personal or business loans are not considered to be part of your wealth, thus making them ineligible for Zakat.
An Illustrated Guide to Paying Zakat
Working out how much Zakat to pay and how to pay it can be sometimes difficult and for that reason, we have created this illustrated guide that’s easy-to-follow and covers everything from why we give Zakat to who receives it and everything in between!
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Muslim Hands was established in the UK in 1993. Muslim Hands is an international aid agency and NGO working in over 50 countries worldwide to help those affected by natural disasters, conflict and poverty. Muslim Hands Canada is a registered charity with the Canada Revenue Agency (Charity Registration No. 81126 4985 RR0001).