Zakat (literally "purification" and "growth") is wealth flowing from those who have to those who do not. It is not charity in the optional sense — it is a right the poor have over the wealth of the rich, set out in the Quran and the Sunnah of the Prophet Muhammad (peace be upon him).
خُذْ مِنْ أَمْوَٰلِهِمْ صَدَقَةً تُطَهِّرُهُمْ وَتُزَكِّيهِم بِهَا
Take from their wealth a charity that purifies them and causes them to grow [in piety].
Quran, At-Tawbah 9:103
The Five Conditions
You owe zakat if all five of these are true:
- You are Muslim.
- You are free of crippling debt that would reduce your net wealth below nisab.
- You own (with full ownership) wealth that has been in your possession the whole lunar year.
- That wealth equals or exceeds the nisab threshold.
- A full lunar (Hijri) year — about 354 days — has passed on that wealth.
Nisab: the Minimum Threshold
Nisab is the wealth floor below which zakat is not due. Two standards exist, both set by the Prophet (peace be upon him):
- Gold standard: 87.48 grams of gold (about 7.5 tola, or 20 mithqal).
- Silver standard: 612.36 grams of silver (about 52.5 tola, or 200 dirhams).
Most contemporary scholars recommend the silver standard for those whose primary wealth is cash, since it is much lower today and so more zakat reaches the poor. The Hanafi school is firmest on this. Other scholars argue the gold standard better reflects the value originally intended. Both views are valid; the silver standard is more cautious.
What Counts as Zakatable Wealth
- Cash — any currency, in hand or in any bank account.
- Gold and silver — including jewellery (the Hanafi position; the Maliki and Shafi'i schools exempt women's personal jewellery in normal use).
- Business inventory — at the wholesale resale value.
- Stocks and investments — if held for trading, the full value is zakatable; if held for dividends only, the underlying zakatable assets of the company are.
- Money owed to you that you reasonably expect to recover.
What Is Not Zakatable
- Your primary residence.
- Personal vehicles, clothes, household items.
- Tools of your trade.
- Money you owe in immediate debt (mortgage, loans) — Hanafi and Hanbali schools allow deducting this before calculating; Shafi'is rule that debt does not reduce your zakatable wealth.
The 2.5% Calculation
Once you have your zakatable total, the calculation is straightforward: 2.5%, or one-fortieth. It is a small fraction that purifies the whole. Example: if your zakatable wealth on your zakat anniversary is £10,000, you owe £250.
Pick a fixed Hijri date as your zakat anniversary — many Muslims choose 1 Ramadan because the reward is multiplied. If wealth went above nisab and stayed there until your anniversary, zakat is due. Don't worry about every fluctuation in between.
Who Receives Zakat
The Quran lists eight categories:
إِنَّمَا ٱلصَّدَقَٰتُ لِلْفُقَرَآءِ وَٱلْمَسَٰكِينِ وَٱلْعَٰمِلِينَ عَلَيْهَا وَٱلْمُؤَلَّفَةِ قُلُوبُهُمْ وَفِى ٱلرِّقَابِ وَٱلْغَٰرِمِينَ وَفِى سَبِيلِ ٱللَّهِ وَٱبْنِ ٱلسَّبِيلِ
Charity (zakat) is for the poor, and the needy, and those employed to administer it, and those whose hearts are to be reconciled, and to free those in bondage, and for those in debt, and in the cause of Allah, and for the wayfarer.
Quran, At-Tawbah 9:60 (partial)
In practice, most Muslims today give through trusted zakat funds and charities, who distribute according to these categories. You may also give directly to a poor relative who is not your dependant (your parents, spouse, or children cannot receive your zakat).
Zakat al-Fitr (Eid Charity)
Separate from annual zakat, every Muslim household pays Zakat al-Fitr before Eid al-Fitr — a small charity in food (or its monetary equivalent) on behalf of every member of the family, including children. While many modern institutions allow monetary equivalents, several schools strictly require this to be given as actual food. This ensures the poor share in the celebration.
Walks through assets, debts, the nisab check, and your final 2.5%.
Many Muslims pay zakat in Ramadan — read the rhythm of the month.