How to Calculate Zakat: The Formula, Nisab and a Worked Example

You don't need a zakat calculator app to calculate zakat — you need one formula and one honest inventory. Zakat is 2.5% of your zakatable wealth, due once that wealth has stayed at or above the nisab (85 g of gold or 595 g of silver) for one full lunar year. Here's the whole method, step by step.

The formula

Everything below unpacks this one line:

Zakat due = 2.5% × total zakatable wealth — payable if that wealth ≥ nisab, and has remained so for one lunar year (the hawl).

Three terms to pin down: what counts as zakatable wealth, what the nisab is, and how the hawl year works. Get those three right and any calculator — including the back of an envelope — gives the same answer.

Step 1: Inventory your zakatable wealth

Zakat falls on wealth that is held or grown, not on things you use. On your zakat date, add up:

• Cash — physical, checking, savings, payment apps, foreign currency.
• Gold and silver — bullion, coins, and (per the Hanafi school) jewelry too; other schools exempt jewelry in regular personal use. Ask your scholar which you follow.
• Business assets — inventory and trade goods at current market value, plus business cash receivables.
• Investments held for growth — shares bought for resale are generally zakatable at market value; long-term holdings and retirement accounts are treated differently across scholarly opinions, so get a specific ruling for your situation.
• Money owed to you that you realistically expect to be repaid.

Not zakatable: your home, car, furniture, clothes, tools of your trade, and personal effects — regardless of value. Most scholars also allow deducting debts that are due now (this month's bills, not your entire 30-year mortgage) from the total. Where opinions differ, this guide stays out of it: a five-minute question to a local imam beats a confident guess.

Step 2: Find the nisab — in grams first

The nisab is the minimum wealth at which zakat applies, fixed by the Prophet ﷺ in physical metal, not in any currency:

• Gold standard: 85 grams of gold
• Silver standard: 595 grams of silver

Because metal prices move daily, never rely on a dollar figure you read somewhere — including here, which is why we don't print one. On your zakat date, look up the live price per gram of gold or silver and multiply. For mixed wealth (cash, savings, stock), many contemporary scholars prefer the silver nisab because it is lower — more people qualify to pay, which serves the poor. Others hold to gold. Choose one standard with guidance and stick to it year over year.

Step 3: The hawl — one lunar year

Zakat is due when your wealth has remained at or above nisab for one full lunar year (about 354 days). In practice: the first day your wealth crosses nisab starts your clock; one Hijri year later, if you're still at or above nisab, you pay 2.5% of whatever you hold on that day — not the average, not the minimum. Most people simplify by fixing a permanent zakat date on the Hijri calendar — many choose a date in Ramadan for the extra reward of charity in that month — and paying annually on it. Note that a lunar year is ~11 days shorter than a solar year; if you calculate on a fixed Gregorian date instead, many scholars advise adjusting the rate to about 2.577% to compensate.

A worked example — in grams

Amina fixes her zakat date at 1 Ramadan. To keep the math currency-proof, she values everything in grams of gold:

• Savings and cash: equivalent of 160 g of gold (she divided her bank balance by today's gold price per gram)
• Gold jewelry she follows the Hanafi position on: 60 g
• Shares held for trading: equivalent of 30 g
• Bills due this month: equivalent of −10 g

Total zakatable wealth: 240 g of gold equivalent. That's above the 85 g gold nisab, and she's been above nisab all year, so zakat is due:

240 g × 2.5% = 6 g of gold equivalent.

On her zakat date she multiplies 6 g by the live gold price per gram and pays that amount in her own currency. That's the entire calculation — the same three steps at any scale.

Zakat is yearly. Salah is five times a day.

Hayya keeps the daily pillar on track — prayer times, one-tap logging, Hijri calendar for your zakat date. Free, no ads, offline.

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Common mistakes to avoid

Using a stale nisab figure. A dollar nisab from last year's article can be meaningfully wrong. Grams are fixed; prices aren't. Convert on the day you pay.

Paying on income instead of holdings. Zakat isn't an income tax. It falls on what you're holding on your zakat date, whenever it was earned — money earned last week counts if you hold it on the day, per the majority view that mid-year additions join the existing hawl.

Skipping years you "forgot." Missed zakat years remain owed, like a debt. Estimate past holdings honestly, the same way missed prayers are estimated — our qada calculator guide covers that mindset of honest back-calculation.

Confusing zakat with zakat al-fitr. Zakat al-fitr is the separate small per-person payment before Eid al-Fitr prayer. The 2.5% wealth calculation here is the annual pillar.

FAQ

What is the formula for calculating zakat?

2.5% of your total zakatable wealth, due if it has stayed at or above nisab (85 g gold / 595 g silver) for one lunar year. Convert the nisab using the live metal price on your zakat date.

What counts as zakatable wealth?

Cash, gold and silver, business inventory, growth investments, and recoverable debts owed to you. Home, car and personal items are exempt. Jewelry and retirement accounts differ by school — ask a scholar.

Do I use the gold nisab or the silver nisab?

For mixed wealth, many contemporary scholars advise silver (595 g) as it's lower and benefits the poor; others use gold (85 g). Pick one with guidance and apply it consistently.