How much zakat do I have to pay, and on what?

The rate, and how to work it out

The amount owed is a quarter of a tenth — ruba' al-'ushr — which is 2.5%. IslamWeb (fatwa 262198) states it plainly, and Shaykh Ibn Baz gives the same figure in the form most people find easiest to hold onto: twenty-five out of every thousand.

"The amount of zakat due on wealth is a quarter of a tenth, that is, two and a half out of every hundred — 2.5%."— IslamWeb, fatwa 262198

There is a second way to reach the same number, given by IslamWeb (fatwa 140278): divide the wealth on which zakat is due by forty, and the result is what you owe. So the calculation is not a matter of judgement — the rate is fixed, and only the question of whether your wealth qualifies is left to work out.

What makes zakat due

Two conditions must both be met, and if either is missing, no zakat is owed on that wealth. IslamWeb sets them out in fatwa 261934 and repeats them in fatwa 94758:

• The wealth reaches the nisab: it must equal the value of 85 grams of pure gold or 595 grams of pure silver, or more.
• A full lunar year passes over it: the hawl is twelve lunar months, and the wealth must remain at or above the nisab throughout, in your ownership, without dropping below it in between.

IslamWeb (fatwa 140278) adds that this applies in any currency and any country — what matters is whether what you hold would buy one of those two amounts of gold or silver. Once both conditions are met, the zakat is due immediately; delaying it past that point is not permitted (fatwa 197799).

What zakat is due on

The Hanbali manual Kashshaf al-Qina' by al-Buhuti lists the categories of wealth that carry zakat: grazing livestock (camels, cattle and sheep), what comes out of the earth (grains, fruits, minerals, and honey), the two precious metals (gold and silver), and trade goods. Each of these has its own detailed rules in the books of fiqh.

For most people asking this question, the relevant category is cash and what stands in its place. IslamWeb (fatwa 57387) confirms that money received as compensation is not subject to any special levy — no fifth, no sacrifice — but simply to ordinary zakat, once it reaches the nisab on its own or combined with other cash or trade goods, and a year passes.

Two points that come up often:

• Money set aside for a purpose is not exempt. Shaykh Ibn Baz was asked about wealth reserved for marriage, for paying off a debt, or for building a house. He ruled that zakat is still due on it once the year passes, because the general evidence for zakat on gold, silver and their equivalents makes no exception for intention.
• A debt owed to you is your zakat, not the debtor's. IslamWeb (fatwa 12150) explains that the zakat on money owed to you is paid by you as its owner — and if the debtor is in difficulty, you pay zakat on it only when you receive it, and then for one year.

Gold jewellery

This is the one place where the schools genuinely differ, and it matters because jewellery is common wealth.

IslamWeb (fatwa 94758) reports both positions and directs the reader to a fuller discussion. If you own gold or silver you actually wear, this is worth settling with a scholar you trust rather than assuming.

Working out what you owe

1. Add up your zakatable wealth on a fixed date each year — cash in hand and in accounts, gold and silver, trade goods at their market value, and any debts owed to you that you expect to recover.
2. Check it against the nisab. If it is below the value of 85 grams of gold or 595 grams of silver, no zakat is due this year.
3. Check the year has passed. If this is your first year of owning it, note the date it reached the nisab and pay when that date comes round again.
4. Divide by forty — or take 2.5% — and that is your zakat.

Key takeaways

• The rate is fixed at 2.5%, or one-fortieth, of the wealth on which zakat is due.
• Zakat is owed only when the wealth reaches the nisab — the value of 85g of gold or 595g of silver — and a full lunar year passes over it.
• Cash, gold, silver, trade goods, livestock and crops are the categories the scholars name; money saved for a specific purpose is not exempt.
• Zakat becomes due as soon as the year completes, and delaying it is not permitted.
• On gold jewellery kept for wearing, the majority hold no zakat is due while some scholars, including the Hanafis, require it.

Further reading

• Kashshaf al-Qina' by al-Buhuti, the chapter on the wealth in which zakat is due
• Ibn Baz, Majmu' al-Fatawa

And Allah knows best.