how to work out how much zakat to pay?
Zakat is one of the Five Pillars of Islam. Paying Zakat is an act of worship. Therefore, it is a fundamental part of being a Muslim. At the end of every lunar year, every sane, adult Muslim whose accumulated wealth exceeds the current Zakat Nisab value has to give out a set percentage of their total wealth away to charity causes.
Nisab is the minimum threshold required for an individual to be eligible to pay Zakat in that specific lunar year.
If the overall wealth of a Muslim meets or exceeds the Nisab value, then this Muslim is eligible to pay Zakat.
Your Zakat payment should go towards helping Zakat-eligible individuals, as decreed by the Prophet Muhammad (PBUH). It must be divided between those most in need, as determined by the Holy Qu’ran:
- The poor.
- The needy.
- Travelers in need.
- Those in debt.
- Those being held against their will or in slavery.
- New Muslims and friends of the Islamic community.
- Those in the cause of Allah.
- Administrators of Zakat.
Giving Zakat is based on the current Nisab values that can vary year to year, which makes knowing how much to pay quite difficult. Here is how to make it easier to calculate;
- Your Zakat donation should be 2.5% of your total wealth accumulated over the year.
Let’s say your total assets amounted to (£10,000), which means you are required to pay (£250) as Zakat.
- The Nisab value is related directly to the current value of gold and silver. Therefore, their value, as mentioned in the Holy Qur’an, is (612.36g of silver) or (87.48g of gold).
This way, you can calculate the Nisab value at any given time by converting these weights into your local currency.
What is the nisab of zakat for money
Nisab is the minimum threshold an individual is required to have to be eligible to pay Zakat in that specific lunar year.
Nisab does vary year to year; however, Nisab value is always related directly to the current values of gold and silver described in the Holy Qur’an as the equivalent of 87.48 grams (7.5 tola) of gold and 612.36 grams (52.5 tola) of silver. Therefore, by converting these weights into your local currency, you can calculate the Nisab value at any given time.
Zakat Calculation Formula
Things to consider while calculating your total wealth and assets;
- Money as cash at home or in your bank account.
- The value of gold and silver items owned.
- Loans you have given out.
- Pensions, stocks, shares, and investments.
- Property owned as an investment (not the one you live in).
- Farm and agriculture produce.
At Bonyan, we provide our Zakat Calculator for gold, silver, cash, and other assets to help you determine your overall wealth and subsequently work out how much Zakat you need to pay.
Zakat Percentage on Cash
Zakat should be paid at 2.5% on all cash balance and bank balances in your savings, current, or FD accounts. The amount technically should be in the bank for one year.
Zakat Percentage on Gold
Gold is growing wealth in all its forms. Therefore, when the owned gold reaches its Nisab, it becomes subject to Zakat. Also, when someone hoards it in quantities commonly considered over ordinary accumulation, or when the jewelry in itself or in aggregate is recognized as extravagant. However, women do not pay Zakat for the jewelry they use for ornamentation.
Nisab value is always related directly to the current values of gold described in the Holy Qur’an as the equivalent of 87.48 grams (7.5 tolas) of gold. Thus you can calculate the Nisab value of your gold by converting these weights into your local currency.
Zakat Percentage on Silver
Silver is growing wealth in all its forms, just like gold. When the owned silver reaches its Nisab, it also becomes subject to Zakat. However, a plain silver ring for men, or a silver decorative sword hilt, has no Zakat to pay.
The Nisab value of silver mentioned in the Holy Qur’an is 612.36 grams (52.5 tolas) of silver. Therefore, by converting these weights into your local currency, you can calculate the Nisab value at any given time.
It is 2.5% of your purple wealth.
It is between 2.5 and 20 percent. It depends on the type of your goods.
The Nisab, by the gold standard, is 3 ounces of gold (87.48 grams) or by an equivalent in cash.
Gold price per gram US$ x 85 grams = Nisab.
The value of silver (612.36 grams) – is approximately $606.23.
The value of gold (87.48 grams) – is approximately $6,779.70.
It is 85 gr of 24k gold.
7.5 Tola (3ounces) equals 87.48 grams of gold, 52.5 Tola (21 ounces) equals 612.36 grams of silver.
It is better to change it to US$ and calculate it.
By looking to the Nisab value, which is:
612.36g equating to £324.98 for silver
87.48g equating to £3903.52 for gold
By giving the market value 2.5% of the weight of the jewelry.