How Zakat Is Calculated – Formula, Nisab & Worked Example

In short: add up your zakatable wealth, subtract debts due within the next 12 months, and compare the result with the Nisab. If it is at or above the Nisab, Zakat due is 2.5% of that amount.

Step 1: Value your gold by carat

Gold is valued by its purity. Pure gold is 24 carat, so a 22k item is 22/24 gold. For each item you enter, the calculator works out:

Gold value = weight (grams) × (carat ÷ 24) × price of 24k gold per gram

You can add as many gold items as you need, each with its own carat, and the calculator adds them together.

Step 2: Value your silver

Silver value = silver weight (grams) × silver price per gram

Step 3: Add your other zakatable assets

The calculator adds the amounts you enter for:

Cash on hand
Bank savings (checking and savings balances)
Investments, at the value you consider zakatable (see “Where scholars differ” below)
Business inventory, at its current value

Personal-use items such as your home, car, furniture and clothes are not zakatable and should not be entered.

Step 4: Subtract short-term debts

Debts you must pay within the next 12 months are deducted. This follows the guidance of the National Zakat Foundation, which allows you to deduct:

Bills and expenses already incurred that must be paid in full within 12 lunar months
Overdue payments (arrears)
For long-term loans, such as a mortgage, car loan or personal loan, only the installments due in the coming year, not the whole balance

Interest is not deductible. The same guidance also encourages deducting these debts only if paying Zakat would make it hard for you to repay them. Scholars differ on some details, such as whether a long-term debt may be deducted in full, so see the section below.

Not sure which of your debts count? Please consult your local scholar or Islamic center.

Zakatable amount = gold + silver + cash + savings + investments + inventory − debts due within 12 months

Step 5: Compare with the Nisab

The Nisab is the minimum amount of wealth a Muslim must own, for one full lunar (Hijri) year, before Zakat becomes due. It is defined by a weight of gold or silver, so its value in money changes with metal prices. You choose which standard to use:

Gold Nisab = 85 × price of 24k gold per gram
Silver Nisab = 595 × silver price per gram

Step 6: Zakat due is 2.5%

If zakatable amount ≥ Nisab: Zakat due = zakatable amount × 2.5%

If your zakatable amount is below the Nisab, no Zakat is due.

Worked example

The prices below are made up to keep the arithmetic simple. Always use current prices in your own currency.

Assume 24k gold costs 100 per gram. You own 50 grams of 22k jewelry, 3,000 in cash, 10,000 in the bank and 5,000 in investments, and you owe 1,500 due this year. You use the gold Nisab.

Item	Calculation	Amount
Gold (22k)	50 × (22 ÷ 24) × 100	4,583.33
Cash + bank + investments	3,000 + 10,000 + 5,000	18,000.00
Total assets		22,583.33
Less debts due within 12 months		− 1,500.00
Zakatable amount		21,083.33
Gold Nisab	85 × 100	8,500.00
Zakat due	21,083.33 × 2.5% (above Nisab)	527.08

Where scholars differ

On the following questions there is more than one recognized opinion. We summarize the main views and link to where each one is stated. The calculator does not choose for you. It calculates using the amounts you enter and the Nisab you select.

Gold or silver Nisab?

Gold is now far more valuable relative to silver than it was historically, so the two standards give very different thresholds.

Silver Nisab. Islamic Relief notes that most scholars advise using silver. It is the lower threshold, so more people pay Zakat and more reaches those in need.
Gold Nisab. Other scholars hold that the gold standard better reflects the original threshold today. The Zakat Foundation of America sets the Nisab at the value of 85 grams of gold.

Islamic Relief also notes that if all of your wealth is in gold, the gold Nisab applies, and if it is all in silver, the silver Nisab applies.

If you are unsure which Nisab to follow, please consult your local scholar or Islamic center.

85 g or 87.48 g?

The Nisab was set as 20 mithqals of gold and 200 dirhams of silver, coins from the time of the Prophet ﷺ. Scholars have converted these weights into grams in slightly different ways, which is why you will see two common sets of figures:

Gold	Silver	Used by (examples)
85 g	595 g	This calculator; AMJA (gold); Zakat Foundation of America (gold); Islamic Relief Australia; General Iftaa' Department of Jordan (gold)
87.48 g	612.36 g	Islamic Relief; National Zakat Foundation

Both are accepted conversions. Islamic Relief Australia gives 85 g and 595 g, and notes 87.48 g and 612.36 g as another opinion. The National Zakat Foundation does the reverse. Jordan's official fatwa authority, the General Iftaa' Department, explains that 85 g of gold is the view of most modern scholars. The difference only matters if your wealth is very close to the threshold.

If your local scholar or mosque uses a particular figure, follow their guidance.

Jewelry you wear

Zakatable (Hanafi school). Gold and silver jewelry is zakatable once it reaches the Nisab, even if it is worn regularly.
Exempt (Maliki, Shafi'i and Hanbali schools). Jewelry kept for normal personal use is not zakatable. The Zakat Foundation of America follows this view for jewelry that is not excessive in amount or value.

Both positions are set out by the National Zakat Foundation in a ruling approved by its mufti.

Under every view, jewelry kept as savings or as an investment is zakatable. If you follow the exemption, enter only the gold and silver it does not cover.

Unsure which view applies to you? Please consult your local scholar or Islamic center.

Retirement accounts (401(k), IRA)

This is a modern question, and scholars have reached three main positions:

Not due while you can't access the money without penalty. The Zakat Foundation of America holds that Zakat is not owed on retirement accounts you cannot access without penalty.
Pay every year on what you could withdraw. The Assembly of Muslim Jurists of America (AMJA) gives this formula: amount you could withdraw − early-withdrawal penalty − taxes = zakatable amount, paid annually even if you don't withdraw anything (fatwa 23284, fatwa 85746).
Zakatable, with past years owed once you have access. SeekersGuidance holds that Zakat becomes due once you have full access to the money, and is then owed for every past year. To avoid a large back payment later, it advises paying each year on the plan's total value.

Using the calculator: under view 1, leave retirement accounts out. Under view 2, add the after-penalty, after-tax amount to Investments. Under view 3, add the account's full value.

Retirement accounts are an area where many people seek personal guidance. Please consult your local scholar or Islamic center about which view to follow.

Stocks and long-term investments

What matters is why you hold the shares:

If you hold shares…	Zakat is calculated on…	Example: portfolio worth 10,000
To sell (trading, or planning to cash out)	The full market value on your Zakat date	10,000 × 2.5% = 250.00
As a long-term investment	Only your share of the companies' zakatable assets (their cash, receivables and inventory, but not buildings or machinery)	Using the 25% shortcut: 2,500 × 2.5% = 62.50

Why long-term shares are treated differently: owning a share means owning a small piece of a company. Much of what a company owns, such as factories, offices and equipment, is not zakatable, just as your own home and car are not. So for shares you keep long-term, many scholars require Zakat only on the zakatable part of the company. This is explained by SeekersGuidance and the National Zakat Foundation.

How to find that amount: working it out exactly requires each company's balance sheet. As a practical shortcut, the National Zakat Foundation suggests treating 25% of your portfolio's market value as the zakatable amount and paying 2.5% on that. Some funds and screening apps also publish a Zakat figure per share. If you cannot determine the amount, SeekersGuidance notes that paying on the full market value is the cautious option.

Using the calculator: in Investments, enter the full value of shares you hold to sell. For long-term shares, enter the zakatable amount (for example, 25% of their value if you use the shortcut).

If you are unsure how to treat your investments, please consult your local scholar or Islamic center.

Lunar or solar year

Zakat is due once every lunar (Hijri) year, which is about 11 days shorter than the calendar year. If you pay on a fixed calendar-year date instead, some scholars recommend a slightly higher rate (about 2.577%) to make up for the longer year. To find your Hijri Zakat date, use our Hijri date converter.

Please consult your local scholar or Islamic center for guidance on your Zakat date.

Why you enter prices yourself

Gold and silver prices vary by country and change every day, and local jewelers' rates differ from international spot prices. The calculator asks you to enter the price on your Zakat date, in your own currency, so the result reflects your own market. It also means you can calculate Zakat for a past year you missed, using the prices from that year, and it works in any currency.

Sources

Qur'an 9:60, the eight categories of people eligible to receive Zakat

Nisab

Debts

National Zakat Foundation: Which debts can be deducted from my Zakat calculation?

Jewelry

Retirement accounts

Stocks and investments

This page explains how our calculator works. It is not a religious ruling (fatwa). Found an error? Please let us know.

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