How to Calculate Zakat: Nisab, What Counts and a Worked Example

Zakat is 2.5% of the wealth you have held for one lunar year, once that wealth is above a minimum called the nisab. The hard parts are which nisab to use, what to include and what to subtract. This guide walks through the mainstream method step by step, with a worked example you can check on our zakat calculator.

Ramadan 2027 is expected to begin around February 2027. The exact start depends on the moon sighting. Many Muslims pay zakat in Ramadan, so now is a good time to gather your numbers.

A note before we start. This is a practical guide to the common method, not a fatwa. Scholars differ on several details, and we point those out as we go. For your own situation, ask a qualified scholar or a local Islamic organisation.

The basic rule

Three conditions usually need to be met:

1. You own wealth of a zakatable kind, such as cash, savings, gold, silver, business stock or investments.
2. Your net zakatable wealth is at or above the nisab.
3. You have held it for one full lunar year. This year is called the hawl. A lunar year is about 354 days.

If all three are true, zakat is 2.5% of your whole net zakatable wealth. It is not 2.5% of only the part above the nisab. Dividing by 40 gives the same answer as multiplying by 0.025.

What is the nisab?

The nisab is the minimum amount of wealth that makes zakat due. It is set by weight, not by money:

Standard	Weight	In tola
Gold nisab	87.48 g of gold	7.5 tola
Silver nisab	612.36 g of silver	52.5 tola

Islamic Relief Canada and our calculator use these figures. Some organisations use 85 g of gold and 595 g of silver instead; follow the figure your scholar or organisation uses.

Because metal prices change every day, the money value of the nisab changes too. To convert it, multiply the price per gram by the weight:

Nisab in money = price per gram × grams

Here is how that looks with made-up prices, for example only. They are not today's prices.

• Silver at a hypothetical Rs 1,000 per gram: 612.36 × 1,000 = Rs 612,360
• Gold at a hypothetical Rs 30,000 per gram: 87.48 × 30,000 = Rs 2,624,400

Check the real rate per gram on the day you calculate.

Gold or silver nisab?

The two thresholds are far apart. In most years the silver nisab is much lower than the gold one.

• The Hanafi school uses the silver value. Most Muslims in Pakistan and South Asia follow this school.
• Other schools use the gold value.
• Many organisations, including Islamic Relief, advise donors to use the silver nisab. The reason is practical: a lower threshold means more people pay zakat, so more money reaches people in need.
• Others use the gold nisab, especially when someone's wealth is held only in gold.

If you are unsure, the silver nisab is the more cautious choice, but follow your own scholar.

What usually counts

These assets are generally included at their value on your zakat date:

• Cash in hand, at home or in your wallet
• Bank balances, in current and savings accounts
• Gold and silver in any form: coins, bars and, under the Hanafi view, jewellery
• Investments, such as shares, funds and savings certificates
• Business stock held for sale, valued at what it would sell for
• Money owed to you that you are likely to get back, such as a loan to a friend who is reliable

What usually does not count

Things you own for personal use and basic living are generally exempt:

• The home you live in
• Your personal car
• Household items, furniture, clothes and appliances
• Tools and equipment you use for work

The exception is anything held for trade. A house or car bought to resell is business stock, and is usually zakatable.

Subtracting debts

Debts that are due now, on your zakat date, are generally subtracted. Examples include an unpaid bill, a credit card balance or an instalment that has fallen due.

Long-term debts, such as a home loan, are where opinions differ. Many scholars allow you to deduct only the payments due in the coming year. Some allow more, and some none. The National Zakat Foundation says future bills, like next month's rent or utilities, are not deducted.

Step-by-step method

1. Pick your zakat date. This is the Hijri date one lunar year after your wealth first reached the nisab. Many people use a date in Ramadan.
2. List your zakatable assets at their value on that date.
3. Add them up.
4. Subtract debts due now. This gives your net zakatable wealth.
5. Work out the nisab in money: price per gram × grams.
6. Compare. If your net wealth is at or above the nisab, zakat is due.
7. Multiply by 2.5%.

A worked example

Here is a hypothetical household in Pakistan. Every number is invented for illustration, and the metal prices are the made-up ones from above.

Item	Amount
Cash at home	Rs 50,000
Bank balances	Rs 400,000
Gold: 20 g at a hypothetical Rs 30,000/g	Rs 600,000
Investments and savings certificates	Rs 250,000
Loan to a relative, expected back	Rs 100,000
Total zakatable assets	Rs 1,400,000
Less: debts due now	− Rs 150,000
Net zakatable wealth	Rs 1,250,000

Using the silver nisab (Rs 612,360 in this example): Rs 1,250,000 is above the threshold. Zakat is Rs 1,250,000 × 2.5% = Rs 31,250. Dividing by 40 gives the same figure.

Using the gold nisab (Rs 2,624,400 in this example): Rs 1,250,000 is below the threshold, so no zakat would be due.

The choice of nisab changes the answer from Rs 31,250 to nothing. The family's home and car are not in the table, because they are for personal use.

You can enter these same numbers in the zakat calculator to check the result.

Using the calculator

Our free zakat calculator follows the method above. It has fields for cash, bank balances, gold and silver at market value, investments and savings certificates, business stock and receivables, money owed to you, and debts to deduct.

A few things to know:

• You enter money values, not grams. Work out the value of your gold first: grams × today's rate per gram.
• The nisab is editable. It starts with a silver-based default. You can type your own figure, or enter today's silver rate per gram and it sets the nisab to that rate × 612.36 g.
• For the gold nisab, work out 87.48 × today's gold rate and type it into the nisab field.
• Fields are labelled in rupees. The maths works in any currency, as long as every field uses the same one.
• It does not track the lunar year. It assumes you are calculating on your zakat date.

When to pay

Zakat is due once the lunar year has passed with your wealth at or above the nisab. Many people choose Ramadan because rewards are hoped to be greater then. Keep the same Hijri date each year so your hawl stays consistent.

Questions to ask a scholar

Ask a qualified scholar or local Islamic organisation about:

• Jewellery you wear. The Hanafi school counts all gold and silver jewellery. Some other schools exempt jewellery in regular personal use.
• Pensions and retirement accounts, and whether you can access the money now.
• Long-term debts such as a home loan, and how much to deduct.
• Shares held for the long term, where some organisations use a simplified method.
• Rental property and the income from it.
• Which nisab to follow if your wealth is mostly in gold.