Zakat is the third pillar of Islam — an annual obligation on qualifying wealth, owed to specific recipient categories named in the Quran (9:60). This guide walks through the full 2026 calculation, with updated nisab thresholds and worked examples.
Step 1: Confirm you are required to pay Zakat
Zakat is owed by every adult Muslim whose net qualifying wealth has remained at or above the nisab threshold for one full lunar year (hawl). Children, those temporarily below nisab, and those whose wealth fluctuates above and below nisab during the year may have different obligations — consult a scholar in unclear cases.
Step 2: Identify your nisab threshold
Two nisab thresholds exist:
- Gold nisab: 87.48 grams (about 7.5 tola). At April 2026 prices (~$78/g), this is approximately $6,820 USD.
- Silver nisab: 612.36 grams (about 52.5 tola). At April 2026 prices (~$0.95/g), this is approximately $582 USD.
The Hanafi school favors the lower (silver) nisab because it brings more zakat into circulation to the needy. The Shafi'i, Maliki, and Hanbali schools generally use the gold nisab. Choose based on your madhab. Bakara 195 uses the silver nisab as the conservative default in our calculator.
Step 3: Sum your zakat-eligible assets
Include:
- Cash on hand and in bank accounts (checking, savings, money market)
- Gold and silver in any form (jewelry, coins, bullion)
- Investment holdings (stocks, bonds, mutual funds, ETFs)
- Cryptocurrency (BTC, ETH, stablecoins, etc.) — at fair market value on your zakat date
- Business inventory and accounts receivable
- Rental income received and not yet spent
- Loans you have given out and expect to be repaid
Exclude:
- Your primary residence
- Personal vehicles, furniture, clothing
- Tools of your profession (laptops, equipment, etc.)
- Capital invested in fixed business assets (real estate held for use, not resale)
- Retirement accounts that are not yet vested or accessible without major penalty (some scholars differ — see below)
Step 4: Subtract immediate liabilities
Deduct debts that are immediately due — credit-card balances you can pay this month, immediate loan payments, taxes owed for the current period. Do not deduct long-term mortgage principal or future obligations.
Step 5: Apply the 2.5% rate
If your net zakat-eligible wealth (assets minus liabilities) exceeds the nisab, you owe 2.5% of the net wealth as Zakat.
Worked example
| Item | Amount (USD) |
|---|---|
| Checking + savings | $15,000 |
| Gold jewelry (estimated) | $8,000 |
| Stock portfolio | $22,000 |
| Crypto (BTC + USDC) | $5,000 |
| Total assets | $50,000 |
| Less: credit card balance immediately due | -$2,000 |
| Net zakat-eligible wealth | $48,000 |
| Zakat owed (2.5%) | $1,200 |
Step 6: Distribute to eligible recipients
Quran 9:60 names eight recipient categories: the poor (fuqara), the needy (masakin), zakat administrators, those whose hearts are inclined (mu'allafa), captives, those in debt (gharimun), in the path of Allah (fi sabilillah), and travelers (ibn al-sabil). The vast majority of contemporary Zakat goes to the poor and needy categories.
You can pay all of your Zakat to a verified Zakat-distribution organization, split it across multiple causes, or designate it for specific eligible regions (e.g., "Zakat for Yemen orphans" or "Zakat for Palestinian refugees").
Special situations
Retirement accounts
Scholars differ on 401(k)s and IRAs. Conservative position: pay zakat on the vested, accessible balance annually. Lenient position: pay zakat only when funds are withdrawn. Consult your scholar.
Mortgaged real estate held for resale
Pay zakat on the equity (current market value minus outstanding mortgage), not on the loan amount.
Cryptocurrency
Most contemporary scholars treat crypto as a zakat-eligible asset like cash, valued at fair market on your zakat date. The AAOIFI standards published in 2024 confirmed this position.
When to pay
Pay Zakat once per lunar year (354 days). Most donors choose Ramadan (multiplied reward) or a fixed annual date. The lunar-year hawl runs from when your wealth first crossed nisab.
"Take from their wealth a charity by which you purify them and cause them increase, and pray for them. Indeed, your prayers are reassurance for them." — Quran 9:103
Use our Zakat calculator to compute your 2026 obligation in 90 seconds →
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