What is Zakat and Why Does it Matter?
Zakat is the amount of charity every Muslim is obligated to pay if their wealth exceeds the nisab threshold for a full lunar year. Paying zakat is one of the five pillars of Islam as governed by Sharia law.
Zakat can also only be used in certain ways, meaning that Muslims should feel confident that their zakat is going toward people and communities that need it most!
Zakat is slightly different from sadaqah, which is an optional form of charity performed by Muslims. Sadaqah can be a financial donation or an act of service.
Annual zakat is also different from zakat-al-fitr, which is a donation of food that must be given before the Eid prayer during Ramadan. Zakat-al-fitr is also a compulsory gift from adult Muslims with excess food.
Giving zakat faithfully every year helps ensure all Muslims are uplifted together through shared wealth and prosperity.
Understanding the Nisab
The nisab threshold marks the amount of wealth Muslims can have before they are obligated to pay zakat. The zakat rules dictate that anyone possessing more than the nisab for a full lunar year must give away 2.5% of that excess.
The current value of gold and silver determines the nisab amount, using the following amounts of each metal:
- 612.36 grams of silver
- 87.48 grams of gold
Therefore, determining the current nisab value relies on the market value for each amount of metal. Our zakat calculator prompts you to add the current market price per gram for gold so you can easily calculate how much you owe – without any hassle!
Frequently Asked Questions
How do I calculate my zakat?
Use our zakat calculator to easily find out how much zakat you owe! Simply look up the current market value of gold per gram, then add your assets (cash, investments, etc.) and liabilities (debt, unpaid bills, etc.). Our zakat calculator will then find 2.5% of your total wealth, which is the amount of zakat you owe.
How much is the nisab in U.S. dollars?
The nisab threshold is determined by the current market value of 87.48 grams of gold or 612.36 grams of silver. Since this varies throughout the year, the nisab amount in U.S. dollars will also vary.
Can rent be deducted from zakat?
Yes, you can deduct upcoming and unpaid rent expenses to determine your zakat. For example, if you have rent to pay before the end of the lunar year, you can deduct that now to calculate the zakat you owe.
Who are the recipients of zakat?
Zakat can only be distributed to eight types of recipients:
- The poor: those whose wealth does not reach the nisab threshold.
- The needy: those with insufficient income to meet their needs.
- Zakat administrators: zakat can be used to cover administrative costs.
- New Muslims: those who need financial assistance to strengthen their faith and community.
- Enslaved people: zakat can be used to free individuals from modern forms of slavery.
- The indebted: those whose debt overwhelms their ability to pay for their needs.
- In the cause of Allah: zakat can be used for initiatives that promote well-being.
- Stranded travelers: those who don’t have sufficient resources to get home.
Can zakat be given to family members?
Yes, you can give zakat to family members who meet the conditions of the eight types of zakat recipients. However, they cannot be part of your immediate family because you are already obligated to support those family members financially or otherwise.
