Zakat rules: nisab, hawl, the 2.5% rate and beneficiaries
A clear guide to the four rules that decide whether you owe zakat, how much, when, and who may receive it.
1. Nisab: the wealth threshold
Nisab is the minimum wealth at which zakat becomes obligatory: 87.48 g of gold or 612.36 g of silver, valued at the market price on your due date.
The silver nisab is lower, so zakat becomes due sooner and benefits more poor people; many scholars recommend it. The gold nisab remains valid and widely used. You choose the basis in the app settings.
Nisab is compared to your net zakatable wealth: zakatable assets minus deductible short-term debts.
2. Hawl: the lunar year
Hawl is the lunar year (about 354 days) during which your wealth stays above nisab. Zakat falls due at the end of that period.
Pick an annual due date (for example 1 Ramadan) and keep it year after year. Fluctuations during the year do not cancel the obligation as long as wealth is above nisab at the start and end of the hawl.
3. The 2.5% rate
Zakat on cash, gold, silver, investments, trade stock and recoverable loans is 2.5% (1/40) of net zakatable wealth.
Other rates apply outside this scope: 5% or 10% on crops depending on irrigation, 20% on extracted treasure (rikaz). The calculator applies 2.5% to monetary wealth.
4. What is zakatable and what is deductible
Zakatable: cash, bank and savings accounts, gold and silver, shares and investments, trade inventory, property held for resale, loans you expect to recover.
Not zakatable: your home, personal vehicle, furniture, and tools used in your work rather than resold.
Deductible: debts already due and immediate liabilities (rent, bills, this month's instalments) — not the full balance of a long-term loan.
The 8 categories of zakat recipients (Quran 9:60)
1. The poor (al-fuqara)
Those with almost no means of living.
2. The needy (al-masakin)
Those whose income does not cover essential needs.
3. Zakat administrators
Those appointed to collect and distribute zakat.
4. Those whose hearts are to be reconciled
New Muslims and those to be supported.
5. Freeing captives
Freeing slaves, captives and people in bondage.
6. Those in debt (al-gharimin)
People unable to repay lawful debts.
7. In the cause of Allah (fi sabilillah)
Causes serving the defence and welfare of the community.
8. The stranded traveller (ibn as-sabil)
A traveller cut off from means far from home.
These rules are applied automatically by the calculator.