Zakat is the third pillar of Islam: an annual obligatory payment on wealth that exceeds the nisab threshold and has been held for one complete lunar year (hawl). The rate is fixed at 2.5% of net zakatable wealth, and it applies to every free, sane, adult Muslim who meets the threshold.
Key facts
- Rate: 2.5% of net zakatable wealth above the nisab threshold
- Gold nisab: 87.48 grams of pure (24ct) gold
- Silver nisab: 612.36 grams of fine (.999) silver
- Hawl: wealth must be held above nisab for one complete lunar year (~354 days)
- Obligatory for: free, sane, adult Muslims above the nisab threshold
- Eligible recipients: eight categories defined in the Quran (9:60)
What is Zakat?
The word zakat (زكاة) means purification and growth. By paying it, a Muslim purifies their wealth and fulfils one of the five pillars of Islam. It is distinct from sadaqah (voluntary charity) — zakat is obligatory, with a specific calculation, specific payers, and specific recipients defined in the Quran.
The obligation appears in the Quran more than eighty times, typically paired with salah (prayer). The Quran specifies eight categories of eligible recipients in Surah At-Tawbah (9:60): the poor (fuqara), the needy (masakin), zakat collectors (amileen), those whose hearts are to be reconciled (muallafah qulubuhum), freeing of captives (fi al-riqab), the debt-ridden (gharimeen), those who strive in the way of Allah (fi sabilillah), and the stranded traveller (ibnu'l-sabil).
Who Must Pay Zakat?
Zakat is obligatory on a Muslim who meets all four conditions simultaneously:
- Muslim: Zakat is not obligatory on non-Muslims.
- Free (not enslaved): Historically relevant; practically universal today.
- Sane adult (Hanafi): The Hanafi madhab requires the payer to be sane and of age. The Maliki, Shafi'i and Hanbali madhabs require zakat on the wealth of minors and those who lack mental capacity — the guardian pays on their behalf.
- Possessing wealth above nisab for a complete hawl: The wealth must exceed the nisab threshold at both the beginning and end of the lunar year.
The Nisab Threshold
Nisab is the minimum amount of wealth a Muslim must own before zakat is due. It is expressed as a weight of precious metal — either gold (87.48g) or silver (612.36g) — and converted to pounds sterling at the current LBMA spot price. The weights are fixed and universal across all four madhabs; only the metal choice and the live price changes.
Because silver is much cheaper per gram than gold, the silver nisab results in a significantly lower pound threshold. Most UK Islamic charities default to silver, as it is the more cautious choice (more Muslims are liable under the lower silver threshold). You can choose either when using this calculator. See the Nisab Explained guide for a full breakdown.
What Wealth is Zakatable?
The scholars agree on the following categories of zakatable wealth for a typical UK Muslim:
- Cash: current accounts, savings, Cash ISAs, premium bonds, cash at home, foreign currency
- Gold and silver: investment gold/silver for all madhabs; worn jewellery for Hanafi Muslims (exempt for others)
- Investments: listed stocks and shares, mutual funds and ETFs (at market value), rental income owed
- Pensions: SIPPs and personal pensions (accessible portion); workplace DC pensions are debated
- Business assets: stock-in-trade at sale value, trade debtors (recoverable), business cash — minus business creditors
- Money owed to you: amounts that are definitely or probably recoverable
- Cryptocurrency: at market value on your calculation date
Fixed assets such as your home, car, and business equipment used in production are generally not zakatable — only productive and liquid wealth is included.
Deductible Liabilities
Immediate debts that are due within the current zakat year can be deducted from your total zakatable assets. These include:
- Overdue bills and immediate debts payable now
- HMRC tax due now
- The next 12 months of mortgage payments (not the full mortgage balance — only the immediate portion)
- Business creditors (amounts your business owes to suppliers within the year)
The Hawl Requirement
Hawl (حول) is the Arabic term for one complete lunar year. For zakat to be due, you must have held net zakatable wealth above the nisab threshold for a full hawl. The lunar year is approximately 354–355 days — about 10–11 days shorter than the Gregorian solar year.
If your wealth drops below nisab at any point during the hawl year, the clock resets when it rises above nisab again. Many UK Muslims use Ramadan as their annual zakat anniversary — this is a recommended practice, though any date works. See the Hawl guide for more detail.
The Calculation Formula
Add all zakatable assets
Sum the value of cash, gold, silver, investments, pensions (where applicable), business assets, and money owed to you — applying your madhab's specific rules for each category.
Subtract immediate liabilities
Deduct debts due now, tax owed, and the next 12 months of mortgage repayments. Do not deduct the full mortgage balance.
Check against the nisab threshold
If your net zakatable wealth is below the nisab threshold, no Zakaat is due. If it is at or above, proceed to step 4.
Apply the 2.5% rate
Multiply your net zakatable wealth by 2.5% (or equivalently, divide by 40). This is fixed across all four madhabs — there is no negotiation on the rate.
How Your Madhab Affects the Calculation
The four Sunni madhabs agree on the fundamentals: nisab weights, the 2.5% rate, and most zakatable asset categories. The differences that materially change your number are:
| Rule | Hanafi | Maliki | Shafi'i | Hanbali |
|---|---|---|---|---|
| Worn jewellery zakatable? | Yes | No | No | No |
| Minor's wealth zakatable? | No | Yes | Yes | Yes |
| Pay zakat in advance? | Yes | No | Yes | Yes |
| Payment immediate on hawl? | No | Yes | Yes | No |
The jewellery rule is the most significant for UK households, where gold jewellery can represent a substantial portion of a family's wealth. Hanafi Muslims may owe zakat on gold jewellery that non-Hanafi Muslims would correctly exempt.