How Should I Calculate Zakat?

Answered by Shaykh Abdul-Rahim Reasat

Question

I have heard two different techniques on how to calculate zakat and I wanted to understand which one is right. 

In the past, I used to calculate my savings based on a year’s accumulation. This year’s amount would be based on how much I have saved from the past year.

However, most recently I have heard that I should calculate my zakat on everything I have currently, i.e. to disregard the one year rule.

Answer

I pray you are well.

Zakat is due on all your wealth greater than the nisab amount, which is above and beyond your immediate needs. The passing of a lunar year determines whether you owe it or not.

How to Calculate Zakat

So, in simple terms:

Imagine someone with no money being gifted £3000, which is a nisab standard in our scenario, for aguments’ sake. This happens on the first of Ramadan.

Let say his monthly expenses are £1000. During the year his wealth fluctuates, but never goes below the £1000 he needs for his necessities.

On the first of Ramadan, the following year, I, after deducting the £1000 for his necessities, if he has the nisab amount or more, he owes zakat. He looks at all the cash, gold, and silver he has and pays 2.5% of it in zakat.

If he has less than the nisab amount at the end of the year, he does not owe anything. If, during the year, his wealth diminished to the point that he only had the £1000 needed for his expenses the zakat year ends. The next time he has the nisab amount after taking care of his expenses the year will start again for him. When that is complete the above process is repeated. (Zayla’i, Tabyin al Haqa’iq)

Make Your Zakat Do More

If you do happen to owe zakat I would advise you to consider supporting the Islamic Scholars Fund. Its reach and impact is huge, and you’d be supporting many scholars and students who make a real difference in the lives and faith of many Muslims around the world.

Please take a look at the ISF Report.

See also: Zakat: A Comprehensive SeekersGuidance Reader

I hope that helps. May Allah bless you with the best of both worlds.

[Shaykh] Abdul-Rahim Reasat
Checked and Approved by Shaykh Faraz Rabbani

Shaykh Abdul-Rahim Reasat began his studies in Arabic Grammar and Morphology in 2005. After graduating with a degree in English and History, he moved to Damascus in 2007, where, for 18 months, he studied with many erudite scholars. In late 2008 he moved to Amman, Jordan, where he continued his studies for the next six years in Sacred Law (fiqh), legal theory (Usul al-fiqh), theology, hadith methodology, hadith commentary, and Logic. He was also given licenses of mastery in the science of Quranic recital. He was able to study an extensive curriculum of Quranic sciences, tafsir, Arabic grammar, and Arabic eloquence.