Understanding Zakat — the third pillar of Islam
Zakat is one of the Five Pillars of Islam — an obligatory annual charity paid by Muslims who meet the nisab threshold. It purifies wealth and redistributes it to those in need. The Quran mentions Zakat alongside Salah (prayer) in over 30 verses, emphasizing its importance.
"And establish prayer and give zakat, and whatever good you put forward for yourselves — you will find it with Allah." (Quran 2:110)
Nisab is the minimum amount of wealth required for Zakat to be obligatory. There are two measures:
85g
of pure gold (approx. 3 troy oz.)
595g
of pure silver (approx. 21 troy oz.)
Many contemporary scholars use the gold nisab as it is higher and provides more relief for those of modest means. The silver nisab is more inclusive. Use whichever your scholar advises, or use our calculator which applies the lower (silver) threshold by default.
All gold and silver jewellery, coins, and bars. Some scholars exempt personally-worn jewellery; many do not. To be safe, include all.
All cash at home, in checking/savings accounts, money market accounts, and certificates of deposit.
Market value of shares held for trading (full value). For long-term/income investments, some scholars say include zakatable assets of the company proportionally.
Current market value of all cryptocurrency holdings. Most contemporary scholars treat it as a form of currency/wealth.
The vested balance you could access (after penalties/taxes) is the most common approach. Some scholars defer until withdrawal; consult your scholar.
Inventory held for sale at current market value. Business assets (machinery, property) used in trade are generally exempt.
Money others owe you that you expect to receive. Pay Zakat when received if unlikely to be paid back soon.
Allah designated eight categories of Zakat recipients (Quran 9:60):
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