Complete Guide to Zakat Calculation 2026
Zakat is one of the Five Pillars of Islam, requiring eligible Muslims to donate 2.5% of their qualifying wealth annually to those in need. Understanding how to calculate Zakat correctly ensures you fulfill this religious obligation accurately. This comprehensive guide covers Nisab thresholds, eligibility criteria, and step-by-step calculation methods for 2026.
Understanding Nisab Threshold 2026 (Gold & Silver)
Nisab is the minimum amount of wealth a Muslim must possess before Zakat becomes obligatory. There are two standards: gold and silver. The gold Nisab is 87.48 grams (approximately 3 ounces or 7.5 tolas), while the silver Nisab is 612.36 grams (approximately 21 ounces or 52.5 tolas). In 2026, with gold prices around AED 280 per gram and silver at AED 3.5 per gram, the gold Nisab equals approximately AED 24,500 and the silver Nisab approximately AED 2,150. Most scholars recommend using the silver standard as it allows more people to participate in giving, though some prefer the gold standard. Your wealth must exceed this threshold for a full lunar year (Hawl) before Zakat is due.
Who Is Eligible to Pay Zakat?
Zakat is obligatory for adult Muslims who possess wealth above the Nisab threshold for one complete lunar year. You must be of sound mind, free (not enslaved), and have full ownership of the assets. Both men and women are equally obligated if they meet these criteria. Children's wealth may also be subject to Zakat according to some schools of thought, with parents or guardians responsible for payment. The wealth must be productive or have the potential to grow—this includes cash savings, gold, silver, business inventory, investments, and rental income. Personal items like your primary residence, vehicle, furniture, and clothing are exempt. Debts owed to you count as assets, while debts you owe can be deducted from your total wealth.
How to Calculate Zakat: Step-by-Step
Calculating Zakat involves summing all Zakatable assets and subtracting immediate liabilities. First, list your cash in bank accounts and on hand. Add the current market value of gold and silver jewelry (excluding what's regularly worn, per some scholars). Include investments such as stocks, mutual funds, and business inventory at market value. Add money owed to you that's expected to be repaid. Then subtract any debts due within the year, including loans, credit card balances, and unpaid bills. If the net total exceeds Nisab, pay 2.5% (or 1/40th) as Zakat. For example: if you have AED 100,000 in savings, AED 20,000 in gold, and owe AED 15,000 in debts, your Zakatable wealth is AED 105,000, and your Zakat due is AED 2,625.
Types of Wealth Subject to Zakat
Different asset categories have specific Zakat rules. Cash and bank balances are fully Zakatable at 2.5%. Gold and silver are Zakatable whether as jewelry, bars, or coins—the rate is 2.5% of the value. Stocks and shares: you pay Zakat on the market value of tradable shares, or on the underlying Zakatable assets for long-term holdings. Business inventory is valued at wholesale price. Agricultural produce follows different rates (5-10% depending on irrigation method). Rental properties: Zakat is due on rental income saved, not the property value. Retirement funds like pensions are generally exempt until you can access them. Cryptocurrency, increasingly common, is treated like cash or trade goods at 2.5%. Always consult a knowledgeable scholar for complex situations.