Zakah Calculator

During Ramadan, Muslims normally pay Zakah. What follows is a Zakah Calculator which you can use to calculate how much you must pay. Please read the instructions below before using the calculator.

Zakah Calculator Instructions

Alhamdulillah, the month of Ramadhan has been bestowed upon us by Allah (swt). Zakah is one of the five fundamental pillars of Islam, mandatory on all Muslims who are of eligible wealth. Zakah is due from and payable by a person on his/her surplus wealth (and not on their income), which is above the nisab and the nisab has remained with him/her for one Islamic year.

One should remember the date when he/she became sahibe nisab. (The owner of wealth upon which Zakah is due. E.g. 25 Rajab.) Then one has to keep that date in mind and pay Zakah on that date every year. It is difficult for many people to remember that date.

To overcome this difficulty, a practical method is to fix a date, for example on the 1st of Ramadhan, take an account of your total wealth on that date and calculate Zakah, thereforth.

Details of each section to be used in conjunction with the Zakah Calculator.

1. Zakah on Pure Gold and Gold Jewellery

Zakah should be calculated at 2.5% of the market value, as on the date of valuation (in our case we consider 1st of Ramadhan). Most Ulama favour the Market Value prevailing on the date of calculation and not on the purchase price.

2. Zakah on Precious and Semi-Precious Stones

There is some contention on whether these are to be considered for valuation. The hanafi fuqahaa say that Zakah is not due on stones, no matter how precious they maybe. This includes diamonds, jewels, etc. Unless of course, if they are for trading purposes then Zakah will be due on their saleable value.

3. Zakah on Silver

Zakah is to be paid on silver in pure form or jewellery, utensils, decorative items and all household items including crockery, cutlery made of silver at 2.5% of the prevailing market rates.

4. Zakah on Cash and Bank Balances

Zakah should be paid at 2.5% on all cash balance and bank balances in your savings, current or business accounts. The whole balance does not have to be in the bank for one whole year. When you are in it’s possession on the day of calculation, you have to pay Zakah on it. If a person sold his house and got the payment in his account a few days before his Zakah due date, he will have to pay Zakah on the whole amount on that date, even if it’s a million pounds and even if he has intention to buy another property.

5. Zakah on Loans Given to others.

Zakah is payable by you on loans you have given to your friends and relatives. It should be treated as cash in hand. (You may deduct loans payable by you to arrive at the net present value of your wealth.)

6. Zakah on Land and Property

Zakah is not payable on personal residential house even if you have more than one, provided it’s meant for residential purpose only. Also Zakah is not applicable on property given on rent irrespective of how many. However, Zakah is payable on the rental income.

However, if your intention of holding properties is to sell at a future date for a profit or as an investment, then Zakah is payable on the market value. Also, if your intention of holding properties changes in the current year, I.e. from self use to business then you need to pay Zakah on that property value.

7. Zakah on Business

This is for Business Persons only. No matter what business you are into, you’ve got to pay Zakah on all stock in trade. The stock must be valued at it’s cost price. If you have any bills receivable (sales given on credit) then you need to add the same towards calculations.

Deduct the amounts due to your suppliers and deduct the loans on stock on the date of calculation. Dead stock should be calculated on scrap value or its saleable value. Damaged stock should also be valued at its scrap value.

Be honest in the calculations, as Zakah is an insurance on your stock directly from Allah (swt) and who better an insurer than Him.

There is no Zakah on factory buildings or any kind of machinery, but there is Zakah on products produced in the factory (i.e. finished goods value). Please refer to a reliable Mufti or a scholar who can shed more light on your specific issues.

8. Zakah on Partnership Firms

Zakah should be paid separately by the owners. Each partner should calculate his share. He should take the amount standing to his capital and loan account as per the last balance sheet. Add his estimated share of profit till the date Zakah is calculated.

This can only be estimated as it is difficult to calculate the exact profit or loss between an accounting year.

9. Zakah on Agricultural Product

Zakah is payable on all agricultural produce including fruits, commercially grown flowers, vegetables and all types of grains at the harvest time itself. The passing of one year does not apply for agricultural produce. If there are two or more crops on the same land per year, then Zakah has to be paid as many times on the crop, irrespective of the time. This is called Ushr.

The formula for Zakah calculation on agriculture is as follows:

On crops dependent purely on rain water it will be 10% of produce.
On crops not irrigated through rain water but use canal water, tank water, borewell and open wells, the Zakah is 5% of the produce.
For crops dependent partly on rain water and partly on other water, the Zakah applicable would be 7.5% of produce.

10. Zakah on Animals

On all grazing animals like goats, sheep, camel, cows, Zakah is payable. The details of nisab of cattles should be sought from a reliable scholar.

Please consult your local scholar, or Imam who can guide you to the right direction, or refer to books of Fiqh if you would like to have first hand confirmation of the situation.

11. Liabilities Deductions

If you have any pending tax payable to the Government, as of the date of Zakah calculation, then the same may be deducted before arriving at the net worth. If you have taken any loans from any person or institution, and if you have not already deducted the same from any of the above sections, then you can deduct your payables over here. Please be truthful, as Zakah is a sure way of protecting ones wealth if Zakah has been paid on it regularly and fully.