Home Islam What is Zakat | Types, Calculation Formula

What is Zakat | Types, Calculation Formula

by Abru Farzeen

In Islam, everyone wants to know what is zakat, but for most problems, they will not get perfect or accurate answers. That’s why I share with you five key pillars of Islam: shahada, salat, zakat, sawm, and hajj. Every Muslim is obligated to follow these five pillars and live life with a pure soul. If you’re wondering what is zakat, you’ve come to the right place. Zakat is the third pillar of Islam.

Paying Zakat is mandatory for all Muslims who can pay Zakat. The order of paying Zakat is given along with the order of praying for Allah Almighty. It is a financial obligation that every Muslim needs to be fulfilled. Paying Zakat is not mandatory for Muslims who do not have gold or silver or cash savings equivalent to them, as mentioned in Nisab. It helps to create a stable Muslim society.

5 pillars of islam

Zakat Meaning

To understand more about what is Zakat, we need to understand the literal and Islamic meanings of Zakat. The literal meaning of Zakat is to propagate, purify, and increase. The roots of this word ‘Za,’ ‘kaf,’  and ‘ya’ have multiple meanings as mentioned in the Holy Quran, i.e., to purify, to clean, etc.

Zakat in Islam

In Islam, Zakat is a specified portion of wealth that must be paid in the name of Allah. It is a mandatory tax that should be paid by Muslims who have a certain amount of wealth. Most are given as alms in Muslim countries to the people who need Zakat, as mentioned in hadiths.

Allah has created rules and regulations to help maintain a good social condition in society. In an Islamic society, Zakat is a tool for eradicating poverty, leading to a financially stable society free from theft, robbery, and other multiple crimes.

Types of zakat

  • Zakat al-Mal: The most common type of Zakat, Zakat al-Mal, is an annual charity made on an individual’s wealth. Money in cash, gold, silver, and property are all examples of
  • Zakat al Fitr: Another important mandatory financial support for Muslims is Zakat al Fitr. The donation is made before Eid within the time limit specified for it to be valid.

Read More: What is Zakat al Fitr- Firana

Who is eligible for Zakat?

who is eligible for zakat

When you know what is Zakat, you need to know persons who are eligible for Zakat. As mentioned in Surah Tauba, Zakat can be given to

  • Needy
  • Poor people who do not ask for help
  • Employees who collect Zakat
  • For freeing enslaved people and captivating
  • To stranded travelers
  • To people who are in debt
  • For the cause of Allah
  • To encourage to take Islam

These categories are vividly mentioned in the Holy Quran, and the person giving Zakat should keep this in mind so that he may not get distracted.

Who is not eligible for Zakat?

Zakat is like an alms and cannot be given to the immediate family, it cannot be given to the persons mentioned below

  • Immediate family
  • Daughters
  • Sons
  • Grandchildren

It cannot be a family of Hashmi as they are the family of the prophet Muhammad (PBUH).

What is Nisab of Zakat?

A specific amount of assets is mandatory to pay Zakat. This is called Nisab. It is calculated as mentioned in Shariah. According to Shariah, if a person has a specified quantity of gold or silver or any equivalent asset, he would be obliged to pay Zakat.

  • The quantity of gold on which Zakat is mandatory is 48 g
  • The quantity of silver on which Zakat is mandatory is 36 g
  • 1/40th part of cash equivalent to gold or silver is mandatory for Zakat, which is approximately equal to 5%
  • If a person has one of the above-mentioned categories, he must pay Zakat

What is the Zakat Percentage

After you know about what is Zakat, you can infer that Zakat is mandatory because it is the third pillar of Islam; a good percentage of wealth is subjected to be given in the name of Allah. 2.5 % of wealth must be given in Allah Almighty’s name. In other words, if you have assets that are not used for the whole year will be considered for paying Zakat on them. If anything that is owned by you and is under your personal use, e.g., Bills, will not be considered in assets on which Zakat is due.

Zakat formula

As you have understood what is Zakat you have to calculate Zakat which is payable to you This can be done by taking small steps.

  • Identify your assets that are for your personal use in daily life
  • Calculate the worth of the remaining assets
  • Compare the worth of your assets with Nisab (87.48 g of 24k gold)

If your assets are equal to that, multiply it by 2.5, and you will get the amount you are legally responsible for paying.

Zakat on gold

As you know, to measure assets from early times, gold is taken as a measure. In Islam, Zakat is also fixed on a certain amount of gold mentioned in Shariah. If a person owns 87.48 g of gold, he is obliged to pay Zakat on gold.

How to calculate Zakat on gold?

If you want to calculate Zakat on gold, you have to consider some points.

  • You should know how much gold is present in your possession.
  • If gold equals the quantity mentioned in Shariah, you must pay Zakat.
  • According to Shariah, if a person has 87.84 g of 24k gold, he must pay Zakat.

Zakat on cash

As you all understand, what is Zakat and its eligibility criteria? You should also know that it is Zakat, payable in cash. Zakat is a mandatory duty of all Muslims worldwide who are in condition to pay Zakat.

  • Zakat on cash is due like it is on gold or any other valuable material.
  • For this purpose, you must compare the amount of cash in your possession with gold.
  • If the amount is equal to 2.5%, it should be paid in terms of Zakat.

How to calculate Zakat on cash?

If you want to calculate Zakat on cash, you need to have a better understanding of what is Zakat. As mentioned above, Zakat should be paid if the total cash in your savings equals Nisab stated in Shariah; you have to pay Zakat. Y

ou ought to pay 2.5% of your savings in terms of Zakat. You can use multiple software available on different websites if you still have any confusion regarding the calculation of Zakat on your savings, whether they are in the form of cash or not. This software offers ultimate help for the calculation of zakat.


Zakat is the third pillar of Islam. Being a Muslim, you should know what is Zakat and the criterion of Zakat as stated in Shariah. In this article, I have guided you about some general things you should know about Zakat. As per mentioned in Shariyah Nisab is set for paying zakat.

If anyone falls on this criterion he must pay zakat. You should know the eligibility criterion of Zakat and how to calculate Zakat on gold and cash. This article will guide you to overcome the problems and answer the queries regarding the calculation of Zakat.

Frequently Asked Questions (FAQs)

Q. Who pays Zakat?

Answer: At the end of the Holy month of Ramadan and before Eid ul Fitr, every adult Muslim who has resources pays Zakat. The leader of a house can also pay Zakat on behalf of their Children, and other members of the house.

Q. What are the benefits of giving Zakat?

Answer: Zakat not only purifies wealth but also purifies one’s soul. It is also a source of closeness to ALLAH. 

Q. Can I pay Zakat monthly?

Answer: Every Muslim should pay Zakat by the end of the Lunar Year. Those Muslims who have no recourse to pay zakat one time can pay it every month. But the most important thing is that zakat must be paid before the Lunar Year. 

Q. Who cannot receive Zakat?

Answer: Zakat cannot be given to family members.

  • Your Children
  • Your Spouse
  • Your Parents
  • Your Grandparents

Q. Who can receive Zakat?

Answer:  Zakat can be given to the following people like

  • Poor
  • Needy
  • Slaves
  • Those who are new Muslims.

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