Establish prayer and pay Zakat. Whatever good you send forth for yourselves, you will certainly find its reward with Allah. Surely Allah is All-Seeing of what you do. [Qur’an 2:110]

What Is Zakat?

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• One of the Five Pillars of Islam.
• A means of purifying personal wealth.

When Should Zakat Be Paid?

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• Becomes due when two conditions are met:
  • The Nisab – the minimum amount of wealth required before Zakat is obligatory.
  • The Hawl – one full lunar year (354 days) has passed since reaching the Nisab.
• Paid at a fixed rate of 2.5%, applies to annual savings and wealth above the Nisab.

The Nisab Threshold

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• Set by the Prophet Muhammad (pbuh) equivalent to:
  • 87.48 grams of gold.
  • 612.36 grams of silver.

What Can Zakat Be Paid On?

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Since gold and silver are no longer everyday currency, Nisab values should be converted into your local currency using current market rates.

Wealth and assets which are Zakat applicable:

• Cash – In the bank or at home and that which is saved for anything specific.
• Gold and Silver – The value of it in your local currency according to the Nisaab.
• Shares – The value of the shares you own at their market price.
• Money owed to you – If it is expected to be repaid.
• Your Business – The balance sheet value of the stock you possess.
• Your Properties – Any rental income that’s been saved in the year. The equity value of your investment property portfolio is not included as part of your assets in the Zakat calculation.