Calculation Methodology

Overview

Our calculator applies a 2.5% (1/40) rate to your net zakatable wealth that exceeds the Nisab threshold, following the principle agreed upon by the four major Sunni schools of jurisprudence (madhahib).

The formula is:

Nisab Threshold

The Nisab is the minimum wealth one must possess for one lunar year (Hawl) before Zakat becomes obligatory. There are two standards:

• Gold standard: 85 grams of pure gold (approximately 7.5 tola)
• Silver standard: 595 grams of pure silver (approximately 52.5 tola)

The silver threshold is significantly lower in monetary terms, meaning more people would be eligible to pay Zakat under it. Many scholars recommend using the silver standard as it benefits more recipients, while others advise using whichever standard was historically used in your community. Our calculator lets you choose either.

The monetary value of the Nisab changes daily with metal market prices. We use real-time gold and silver prices to compute the current Nisab in your selected base currency.

Asset Categories

Gold

Gold is zakatable by unanimous scholarly agreement. We calculate the pure gold content based on karat purity:

The pure gold weight is then valued at the current market price per gram. We support entry in grams, troy ounces, tola, vori, and aana.

Silver and Other Metals

Silver is unanimously considered zakatable. We value silver at the current market price per gram.

Platinum and Palladium: These metals are not universally considered zakatable by all scholars. Some contemporary scholars include them as trade goods (uruud al-tijarah) if held for investment, while others exclude them. Our calculator includes them for completeness, but consult a scholar regarding your specific situation.

Cash and Bank Accounts

All cash holdings and bank balances are zakatable. Amounts in foreign currencies are converted to your base currency using current exchange rates.

Cryptocurrency

Most contemporary scholars consider cryptocurrency zakatable, treating it as a digital asset similar to cash or trade goods. We value holdings at the current market price in your base currency.

Advanced Asset Types

Stocks and ETFs

Two approaches are supported:

• Full market value: The total current value of your holdings. Used when stocks are held primarily for trading.
• Zakatable portion (30%): An approximate proportion representing the underlying zakatable assets of the company. Used by some scholars for long-term holdings where you are not actively trading.

Retirement Accounts

Scholars differ on retirement accounts due to restricted access. We offer three options:

• Full balance: The entire account value is zakatable
• Accessible portion only: Only the amount you can withdraw without penalty
• Penalty-adjusted: Full balance minus early withdrawal penalties

Receivables

Debts owed to you are categorized by likelihood of collection:

• Likely (100%): Expected to be repaid — counted in full
• Uncertain (50%): Repayment unclear — counted at half value
• Doubtful (0%): Unlikely to be repaid — excluded from calculation

Investment Property

Treatment depends on your intent:

• Held for resale: The full market value is zakatable as a trade good
• Held for rental income: Only the accumulated rental income is zakatable, not the property itself

Business Inventory

Trade goods (inventory held for sale) are zakatable at their current market value. We calculate: inventory value + business cash + business receivables − business payables.

Debt Deductions

Debts you owe can reduce your zakatable wealth. We support two categories:

Credit Cards

Outstanding credit card balances are deducted in full from your total assets.

Recurring Loans

Loan payments are annualized based on their frequency and then deducted. The annualization multipliers are:

Frequency	Multiplier	Example
Weekly	× 52	$100/week = $5,200/year
Biweekly	× 26	$200/2 weeks = $5,200/year
Semi-monthly	× 24	$250/semi-month = $6,000/year
Monthly	× 12	$500/month = $6,000/year
Quarterly	× 4	$1,500/quarter = $6,000/year
Yearly	× 1	$6,000/year = $6,000/year

Some scholars only deduct the next 12 months of payments, while others deduct the full outstanding balance. Our calculator defaults to the 12-month approach.

Currency Conversion

All assets are converted to your chosen base currency using real-time exchange rates. We source rates from multiple providers with automatic fallback to ensure availability.

Pricing Data

Metal prices, exchange rates, and cryptocurrency valuations are sourced from reputable market data providers and updated regularly. Historical snapshots follow a tiered cadence: daily for recent dates, weekly for the past 1-3 months, and monthly for older dates.

Disclaimer

This calculator is a tool to assist with Zakat estimation. It should not replace consultation with a qualified Islamic scholar, especially for complex financial situations. Scholarly opinions vary on several matters including jewelry exemptions, retirement accounts, and non-traditional assets. When in doubt, consult a scholar you trust.