Zakat Explained Simply: Who Pays, How Much, and Who Receives It

Zakat is one of the five pillars of Islam: a yearly payment from your savings to people in need. The word itself means both "purification" and "growth" — giving zakat purifies your wealth and, Muslims believe, brings blessing to it.

The Qur'an mentions prayer and zakat together again and again:

Al-Baqarah 2:43

Who has to pay zakat

Zakat is due from an adult Muslim who:

1. 1Owns wealth above a minimum threshold called the nisab, and
2. 2Has held it for one lunar year (called the hawl).

If your savings stay below the nisab, you don't owe zakat — though voluntary charity (sadaqah) is always encouraged.

The nisab

The nisab is based on the value of:

• 85 grams of gold, or
• 595 grams of silver

Because the silver threshold is lower, more people qualify under it, and many scholars consider it the more cautious choice for cash savings. Others use gold. Both are recognised scholarly positions; practice varies, so ask your local mosque which one they recommend. The value changes with metal prices, so check it when you calculate.

How much is zakat?

For money and most savings, zakat is 2.5% of the total zakatable wealth you've held for a lunar year. So if you have 10,000 in zakatable savings above the nisab, your zakat is 250.

What counts as zakatable wealth

Generally included:

• Cash and bank balances
• Gold and silver (scholars differ about jewellery that is worn regularly)
• Shares, investment funds and cryptocurrency held as investments
• Business stock and money owed to you that you expect to receive

Generally not included:

• Your home
• Your car and personal belongings
• Tools and equipment you use for work

Scholars differ on some items — like retirement accounts, debts you owe, and jewellery — and the details can make a real difference to the amount. This is where a calculator that shows different methods helps.

Who receives zakat

The Qur'an names eight groups:

At-Tawbah 9:60

In everyday terms, this includes the poor and needy, people in debt, travellers in need, and those working to collect and distribute zakat, among others. Zakat isn't given to your own parents, children or spouse — you're already responsible for supporting them — but many scholars allow giving it to other relatives in need, like siblings.

Zakat al-fitr

Separate from yearly zakat, zakat al-fitr is a small charity paid at the end of Ramadan, before the Eid prayer, by every Muslim who can afford it (on behalf of themselves and their dependants). It's usually the cost of a simple meal. Ask your local mosque for the amount where you live.

When to pay

Many Muslims choose a fixed date each year — often in Ramadan, when rewards are multiplied — and calculate their zakat then. What matters is paying once your wealth has been above the nisab for a lunar year.

How AskDeen can help

Working out zakat by hand is easy to get wrong. AskDeen's free Zakat Calculator walks you through it step by step — cash, gold, silver, stocks, crypto, retirement accounts and business assets — with live metal prices for the nisab and a choice of recognised scholarly methods, showing exactly how each number was reached. Your figures stay on your device.

AskDeen can also remember your zakat date each year, track what you've already paid, and remind you before it's due. And if a question comes up — Does my 401(k) count? Can I give zakat to my brother? — just ask.

Purify your wealth with confidence. Try the calculator today.