To calculate zakat, add up the cash, gold, silver and investments you own on your zakat date, subtract debts due within the next 12 months, and check whether the result is above the nisab threshold. If it is, you pay 2.5% of the total. For listed shares, many guides allow a simplified proxy when a full balance-sheet calculation is impractical.
This guide sets out each step with a worked example. It follows published guidance from zakat organisations and AAOIFI, the industry standard-setter. Scholars differ on several points, which we flag where they arise. It is general information, not a fatwa, so check details with a scholar you trust.
What you need before you start
- Your bank and savings balances on your zakat date.
- The weight and purity of any gold or silver you own, and today’s price per gram.
- Current values of shares, funds and other investments.
- A list of money others owe you and money you owe, with due dates.
- Today’s nisab value in your currency, which changes daily with metal prices.
Step 1: Fix your zakat date
Your zakat date is the day you first owned wealth at or above the nisab, and you pay on the same Islamic calendar date every year after that, according to Islamic Relief’s zakat guidance. For example, if your date is 5 Sha’ban, you calculate and pay on 5 Sha’ban each year. If you cannot remember when you first reached the nisab, pick a date and keep to it.
Step 2: Choose the nisab you will use
The nisab is the minimum wealth before zakat is due. It is set at 87.48 grams of gold or 612.36 grams of silver, converted into your currency at today’s price. The National Zakat Foundation notes a second opinion of 85 grams of gold and 595 grams of silver.
Because silver is far cheaper, the two thresholds are very different. NZF recommends the silver nisab if you hold a mix of assets, and the gold nisab only if all your wealth is gold. Islamic Relief notes that most scholars prefer silver because more people then pay zakat.
Step 3: Add up cash and savings
Include cash at home, current and savings account balances, and money in digital wallets. Also include money others owe you if you expect it to be repaid, such as a loan to a relative.
Leave out any interest your accounts earned. Islamic Relief advises that interest should be given away as general charity, not counted as zakat.
Step 4: Value your gold and silver
Weigh each item and multiply by today’s price per gram for its purity. A 22-carat item is about 91.7% gold, so value only the gold content rather than the full weight.
Scholars differ on jewellery worn regularly. Some schools include it in full, while others exempt personal jewellery in normal use. Gold and silver held as savings, bars or coins are zakatable under all views.
Step 5: Value your shares and funds
For shares bought to trade for short-term gain, many scholars count the full market value, so check this with your scholar. For long-term holdings, the ideal is to work out your share of the company’s zakatable assets, such as its cash, receivables and stock, from its balance sheet.
Since that is hard for most people, the National Zakat Foundation’s share guidance allows a proxy: treat 25% of the holding’s value as zakatable, which means paying 0.625% of the total value. NZF bases this on AAOIFI Shariah Standard No. 35, which permits estimation when the exact zakatable amount per share is not available, and on its own analysis of FTSE 100 companies. It does not apply to private companies or cash-rich start-ups, and NZF revises the figure each year.
Step 6: Subtract debts that are due soon
You can deduct debts payable within the next 12 months, up to 12 months of instalments on longer loans, and any overdue payments. You cannot deduct bills not yet due or the full balance of a long-term loan. For a mortgage or student loan, only the overdue or imminently due amount counts, per Islamic Relief’s guidance.
Step 7: Compare with the nisab and pay 2.5%
If your net total is at or above the nisab, multiply it by 2.5%. If it is below, no zakat is due this year.
A worked example
These figures are hypothetical, chosen to show the method.
| Item | Amount |
|---|---|
| Cash and savings | $6,000 |
| Gold coins (value of gold content) | $2,000 |
| Long-term shares worth $10,000, at the 25% proxy | $2,500 |
| Less: credit card balance due | -$1,500 |
| Less: next 12 months of car payments | -$3,600 |
| Net zakatable wealth | $5,400 |
| Zakat due at 2.5% | $135 |
In this example, $5,400 is above the silver nisab, which Islamic Relief listed at about $1,082 in early 2026, so zakat is due. It is below the gold nisab of about $11,383 at that time. This is exactly where the choice in Step 2 matters, so check both values on the day you calculate.
Common mistakes to avoid
- Using a stale nisab value. The threshold moves with metal prices every day. A figure from last year can put you on the wrong side of it.
- Deducting your whole mortgage. Only the amount due in the next 12 months, or already overdue, is deductible. Subtracting the full balance can wipe out zakat that is actually due.
- Counting interest as zakat. Interest earned should be given away separately, not added to your zakat payment.
- Valuing gold by total weight. A 22-carat bracelet is not pure gold. Value only the gold it contains.
- Applying the share proxy to a private company. NZF’s 25% proxy is for listed companies only. Private and cash-heavy businesses need a proper calculation.
FAQ
Views differ, especially on pensions you cannot access yet. Some scholars include the accessible value and others exclude locked funds. Ask a scholar or a zakat organisation for guidance on your specific scheme.
Not on the home you live in or the car you use. Property bought to resell is treated differently from property you live in, so check how your situation is classed.
Some funds publish a zakat-per-unit figure, so check your fund’s reports first. If yours does not, you can use the same approach as for shares.
Many people pay in advance through the year and settle the balance on their zakat date. Keep a record so the total matches your calculation.
Next step
Use today’s nisab figure from a zakat organisation such as the National Zakat Foundation, follow the steps above, and keep your workings for next year. This article explains common methods and is not a religious ruling. For complex cases such as business assets, rental property or pensions, consult a qualified scholar.
