How to Calculate Zakat: Formula, Examples and Madhab Rules
To calculate Zakat, add up the wealth Zakat applies to on your Zakat date, take off the debts your school allows, and check the total against the nisab (the value of 87.48 g of gold or 612.36 g of silver). If the total is at or above it, multiply it by 2.5%, or divide it by 40. Your school changes two lines of the sum: jewellery you wear and debts you owe.
The Zakat formula in one line
(Cash + gold and silver + investments + business stock + money owed to you) minus the debts your school allows = net Zakatable wealth. If that figure reaches the nisab, Zakat due = net Zakatable wealth × 0.025.
The multiplication is the easy part. What decides your figure is what goes into the brackets, and that is what the five steps below work through. If you want the background first (what Zakat is, who must pay and who may receive it), read What Is Zakat? and come back.
Step 1: Set your Zakat date
Zakat on money, gold, silver and trade goods falls due once your wealth has stayed at or above the nisab for one lunar year, called the hawl. Your Zakat date is the anniversary of the day your wealth first reached the nisab. The Shafi'i and Hanbali schools require it to stay at the nisab all year; the Hanafi school looks only at the start and the end of the year, so a dip in between does not matter unless the wealth was wiped out entirely (al-Mawsu'a al-Fiqhiyya, vol. 23, para 32). If you never noted that day, pick an Islamic-calendar date now and keep it. Many people use a date in Ramadan.
A lunar year is about 354 days, eleven days shorter than the Gregorian year. If your records only work on a Gregorian year, Egypt's Dar al-Ifta, in its fatwa no. 8124 of 15 November 2023 on paying Zakat by the solar year, permits paying on that year at a raised rate, which the fatwa gives as 2.577% (2.5 × 365 ÷ 354, rounded down), so that the eleven extra days are paid for. Use one system and stick to it.
Money that arrives during the year is where the schools part ways. The Hanafi school adds new money of the same kind to the wealth whose year is already running and assesses it all on your Zakat date. The Shafi'i and Hanbali schools count new money towards the nisab straight away but give it its own year, so strictly each sum is due on its own anniversary (al-Mawsu'a al-Fiqhiyya, vol. 23, para 30).
Step 2: Work out the nisab in rand
The nisab is fixed in metal, not money: 20 mithqal of gold or 200 dirhams of silver, and the dirham is seven tenths of a mithqal (al-Mawsu'a al-Fiqhiyya, vol. 23, paras 69 and 70). Turning those into grams depends on the modern gram weight given to one mithqal; the two below are the common conversions.
| Mithqal taken as | Gold nisab (20 mithqal) | Silver nisab (200 dirhams) | Used by |
|---|---|---|---|
| 4.374 g | 87.48 g | 612.36 g | The FaraidHub Zakat Calculator |
| 4.25 g | 85 g | 595 g | Also widely quoted |
Other conversions exist too. The two rows above are the ones you will meet most often, and the difference between them is small. Pick the pair your scholar or Zakat body uses and keep it from year to year.
To get your rand figure, multiply the grams by today's price per gram of pure metal. With illustrative round prices (not today's):
- Silver at R30 a gram: 612.36 × R30 = R18,370.80
- Gold at R2,200 a gram: 87.48 × R2,200 = R192,456
That gap is the whole story. The four schools fix both thresholds; which metal to measure cash against is a question today's scholars answer differently. Many Zakat bodies use silver because it brings more people into paying, and some scholars use gold. Ask which your scholar follows, and never switch standards to shrink a year's bill. The Zakat Calculator prices both at live rates.
If you hold both gold and silver but neither reaches the nisab on its own, the schools differ on adding them together. The Hanafi and Maliki schools combine them, by value under Abu Hanifa's own view, and by proportion under Malik's view and that of Abu Hanifa's two companions. The Shafi'i school does not combine them, and two narrations are reported from Imam Ahmad (al-Mawsu'a al-Fiqhiyya, vol. 23, para 76).
Step 3: Add up what Zakat applies to
Value everything on your Zakat date, at the price it would fetch that day. Leave out the things you live with: your home, your car, furniture and clothes carry no Zakat however much they are worth.
Cash, savings and salary
Count every balance you own and can reach: current, savings, fixed deposits, notice accounts, a TFSA held in cash, money in a wallet app and cash at home. Convert foreign accounts at one rate on the same day. Money you have set aside for a car or a wedding is still yours on the Zakat date, so it counts.
Salary carries no separate Zakat. What you earn and spend during the year is gone; what is left on your Zakat date sits in your balances and is counted there.
Gold and silver by carat
Gold is priced by its pure content, and jewellery is an alloy. A 22k piece is 22 parts gold in 24. Multiply the weight by the carat and divide by 24 to get the pure gold, then price that.
| Carat | Gold content | Pure gold in 10 g | Value of 10 g at R2,200 per g pure |
|---|---|---|---|
| 24k | 24/24, pure | 10 g | R22,000 |
| 22k | 22/24, 91.67% | 9.167 g | R20,167 |
| 21k | 21/24, 87.5% | 8.75 g | R19,250 |
| 18k | 18/24, 75% | 7.5 g | R16,500 |
| 14k | 14/24, 58.33% | 5.833 g | R12,833 |
| 9k | 9/24, 37.5% | 3.75 g | R8,250 |
A 1 oz gold Krugerrand holds one troy ounce, 31.10 g, of pure gold, so price it on 31.10 g, not on the coin's full weight. When the question is whether an alloy reaches the nisab at all, the Shafi'i and Hanbali schools count only the pure metal in it. If you sit close to the line, ask your scholar how your school counts the alloy. The Zakat Calculator asks for pure grams, so do this conversion first.
Jewellery you wear
This is the biggest difference between the schools in a household calculation.
| School | Permissible jewellery kept for wearing |
|---|---|
| Hanafi | Zakat due every year, worn or not. |
| Maliki | Not due, including jewellery lent or hired out. |
| Shafi'i | Not due in the school's relied-upon position. A minority view in the school makes it due. |
| Hanbali | Not due. |
Under every school, jewellery kept as a store of wealth, put away with no intention of wearing it, or held for sale is counted. So is gold jewellery a man wears, since gold jewellery is not permissible for him. Coins and bars are never jewellery. The calculator takes jewellery you wear in its own field and counts it or leaves it out by the school you choose.
Shares, unit trusts and ETFs
Start by asking why you hold them. The International Islamic Fiqh Academy (Resolution 28, 1988) answers the two common cases:
- Bought to sell: count the full market value on your Zakat date, plus any dividends you still hold.
- Held for the long term: if the company pays Zakat for its shareholders, you owe nothing more on those shares. If it does not, the Academy's later Resolution 121 (2001) says to pay on your share of the company's zakatable assets (its cash, goods for trade and money owed to it). Where the company has none, you pay only on the dividends you receive.
Resolution 121 asks a holder who cannot get the exact figure to estimate it as closely as possible from the company's accounts. Counting the full market value instead is a common, cautious practice. Unit trusts and ETFs follow the same logic through what the fund holds.
Business stock
Count stock held for sale at its market value on your Zakat date, with business cash and money customers owe you that you expect to collect. Leave out what runs the business: premises, vehicles, machinery, shelving and computers. You can read more on ownership and partnership in What Is Business in Islam?
The Maliki school separates two kinds of trader. One who buys and sells continuously values the stock every year. One who buys and waits for a price rise pays once, for one year, when the stock is sold.
Money owed to you
A loan you made is still your wealth. The question is when you pay on it.
| School | Borrower able and willing to repay |
|---|---|
| Hanafi | Due every year, but you pay only once you collect it, then for every year it was owed. |
| Maliki | A loan is paid on for one year, when collected. A continuous trader's trade debts count every year. |
| Shafi'i | Paid at the end of each year, in the school's main view. |
| Hanbali | Due every year, paid once collected, for every year it was owed. |
A debt you doubt you will see, because the borrower is broke, denies it or keeps stalling, is treated differently across the schools and within them. The International Islamic Fiqh Academy (Resolution 1, 1985) gives a working rule: on a solvent borrower, Zakat each year; on an insolvent or stalling one, Zakat once a year has passed after you receive it.
Property
Your own home: no Zakat. A rental flat: the building carries no Zakat, but the rent you have saved is cash and joins your balances. A plot or house bought to sell: that is trade stock, valued at market on your Zakat date. Hoping to sell one day does not turn an investment into stock; buying it in order to sell does.
Step 4: Subtract the debts your school allows
Debts are the other line where the schools split, and the split can change the answer by thousands of rand.
| School | Do your debts reduce Zakat? |
|---|---|
| Hanafi | Yes. A debt someone can claim from you reduces the cash, trade goods and livestock you pay on, by its amount. Not crops. |
| Maliki | Yes on cash and trade goods, by its amount, but only if you own no other property beyond your needs to set the debt against. Not livestock or crops. |
| Shafi'i | No. In the school's later, relied-upon position a debt does not reduce Zakat at all. |
| Hanbali | Yes on cash and trade goods: a debt owed to a person reduces the wealth you pay on, by its amount, under the same condition as the Maliki school. Not livestock or crops, in the school's relied-upon narration. |
The classical texts of the Hanafi and Maliki schools deduct a debt whether it is due now or later (al-Mawsu'a al-Fiqhiyya, vol. 23, para 35; paras 33 to 36 cover the whole table). A long-term loan, such as a 20-year home loan, is the hard case today: a common practice is to count only the instalments due in the coming year. Ask your scholar before you take the whole balance off.
Step 5: Check the nisab and apply 2.5%
Compare your net figure with the nisab you chose in Step 2. Below it, no Zakat is due this year. At or above it, 2.5% applies to the whole net figure, not only the part above the line. Divide by 40 as a check: R90,000 × 0.025 = R2,250, and R90,000 ÷ 40 = R2,250.
Crops and livestock never go into this total. Produce watered by rain or rivers carries a tenth, and produce irrigated with effort a twentieth (Sahih al-Bukhari 1483, Sahih Muslim 981). Livestock has its own count-based tables. Take both to a scholar.
Let the calculator do steps 2 to 5
Choose your madhab and nisab standard, enter your balances, gold, investments and debts, and see your nisab and Zakat at live gold and silver prices.
Calculate Your Zakat →One household, four schools: a worked example
Here is one household's position on its Zakat date, worked through each school. Prices are the illustrative R2,200 a gram for pure gold and R30 for silver.
- Bank balances and cash: R60,000
- Gold jewellery worn by the owner: 48 g of 22k, which is 44 g of pure gold, worth R96,800
- Shares bought to trade, at market value: R30,000
- Owed to a brother, a loan due this year: R25,000
| Line | Hanafi | Maliki | Shafi'i | Hanbali |
|---|---|---|---|---|
| Cash and bank | R60,000 | R60,000 | R60,000 | R60,000 |
| Jewellery worn | R96,800 | R0 | R0 | R0 |
| Trading shares | R30,000 | R30,000 | R30,000 | R30,000 |
| Less the loan | R25,000 | R25,000 | R0 | R25,000 |
| Net Zakatable wealth | R161,800 | R65,000 | R90,000 | R65,000 |
| Zakat at 2.5% | R4,045 | R1,625 | R2,250 | R1,625 |
Check: R161,800 ÷ 40 = R4,045; R65,000 ÷ 40 = R1,625; R90,000 ÷ 40 = R2,250. The Maliki and Hanbali columns assume the household owns nothing beyond its needs to set the loan against. If your scholar counts the worn jewellery as such property, both columns become R90,000 and R2,250.
Every column clears the silver nisab of R18,370.80. Now switch to the gold nisab of R192,456: even the Hanafi figure of R161,800 falls short, so on the gold standard this household owes no Zakat this year. Your school sets the lines, and the nisab standard decides whether the sum runs at all.
A business worked example
A shop has R80,000 in the bank, R220,000 of stock at market value, R50,000 owed by customers who pay, and R50,000 of supplier invoices due.
- Hanafi: R350,000 less R50,000 = R300,000, so Zakat is R7,500. The owner may wait to pay on the R50,000 owed by customers until it is collected, then pay for each year it was owed.
- Maliki (a continuous trader) and Hanbali: also R300,000 and R7,500, provided the owner has no other property beyond their needs to set the invoices against. The Hanbali owner may likewise wait to pay on the customers' R50,000 until it is collected.
- Shafi'i: the invoices do not reduce Zakat, so R350,000 and R8,750.
The shop's counters, fridges and delivery van are not in any of these figures.
Calculating Zakat in South Africa
The method is the same everywhere; the inputs are local. Price the nisab from the rand price per gram on your Zakat date, not from a figure you saw last Ramadan. Price a 1 oz gold Krugerrand on its 31.10 g of pure gold. Count a TFSA, a money market fund or unit trusts at their value that day, using the shares section above for anything invested in companies. For retirement annuities and pension funds you cannot draw on, scholars differ, as the asset table in our Zakat primer sets out.
Zakat is not income tax. Paying SARS does not discharge it, and it is not calculated on your annual income. It is calculated on what you hold on one day.
Missed years and Zakat owed at death
If you missed years, work each one separately: what you held on that year's Zakat date, against that year's nisab, at that year's rules. Applying today's balance to every past year overstates some years and understates others. Where records are gone, make a careful estimate with a scholar's help.
Whether unpaid Zakat comes out of the estate before the heirs' shares depends on the school. The Shafi'i and Hanbali schools treat it as a debt paid from the estate before any bequest or Faraid share, and the Maliki school pays it from the estate where it is established as unpaid; under the Hanafi school it is paid only if the deceased left a wasiyyah for it, from the one-third. The full positions, with a rand example, are in our primer's section on unpaid Zakat at death, and the order of payment is in What Is Paid Before Inheritance in Islam? The safe course is to note any arrears in your wasiyyah; the Islamic Will Generator puts that in writing.
Your Zakat worksheet
Copy this into a notebook or spreadsheet and fill it in on your Zakat date. Keep last year's next to it.
| Line | What goes in | Amount (R) |
|---|---|---|
| A | Cash and all bank balances | |
| B | Gold and silver: pure grams × price per gram (jewellery per your school) | |
| C | Shares, unit trusts and ETFs (method per Step 3) | |
| D | Business stock at market value, business cash and collectable receivables | |
| E | Money owed to you that you are paying on this year | |
| F | Total: A + B + C + D + E | |
| G | Debts your school allows you to deduct | |
| H | Net Zakatable wealth: F − G | |
| I | Nisab: grams × price per gram (your chosen metal) | |
| J | If H is at or above I: Zakat = H × 0.025 |
Common calculation mistakes
- Taking 2.5% of annual salary instead of what is held on the Zakat date.
- Pricing 22k or 18k jewellery as if it were pure gold.
- Deducting a whole home-loan balance without asking whether your school allows it.
- Counting the family home, the car or business equipment.
- Switching between the gold and silver nisab from year to year to lower the bill.
- Forgetting money lent to family, or a share portfolio held through a broker.
Sources
Qur'an: Surah Al-Baqarah 2:43; Surah Al-An'am 6:141; Surah At-Tawbah 9:60. Hadith: Sahih al-Bukhari 1395 and 1483; Sahih Muslim 981 (numbering as on sunnah.com). The school positions on jewellery, debts, combining gold and silver, money owed to you, alloys, trade goods and money received during the year follow al-Mawsu'a al-Fiqhiyya al-Kuwaitiyya (Ministry of Awqaf and Islamic Affairs, Kuwait): vol. 23, entry Zakat, paragraphs 21 to 22, 30, 32 to 36, 68 to 71, 76, 84 to 90 and 126; and vol. 18, entry Huliyy (jewellery), paragraph 9. International Islamic Fiqh Academy Resolutions 1 (1/2) on Zakat on debts (1985), 28 (3/4) on Zakat on company shares (1988) and 121 (3/13) on Zakat on shares held for income (2001). Dar al-Ifta al-Misriyya, fatwa no. 8124 (15 November 2023) on paying Zakat on a solar year, for the 2.577% rate. The illustrative gold and silver prices are round figures for the arithmetic, not market quotes. This article is general educational information. For your own calculation, a business, or a debt or investment that changes the result, consult a qualified scholar who follows your school.