📖 15 min read
بِسْمِ اللَّهِ الرَّحْمَنِ الرَّحِيمِ
In the name of Allah, the Most Merciful, the Especially Merciful.
Zakat (الزَّكَاة) is the third pillar of Islam and one of the most important foundations of the Muslim faith. More than simple charity, it is a right of the poor over the wealth of those who have the means, prescribed by Allah to purify wealth and strengthen solidarity within the community. Prophet Muhammad ﷺ said: “Islam is built upon five pillars: testifying that there is no deity worthy of worship except Allah and that Muhammad is His Messenger, establishing prayer, paying Zakat, fasting during Ramadan and making pilgrimage to the Sacred House for those who are able.” (Narrated by Al-Bukhari, no. 8, and Muslim, no. 16, from Ibn ‘Umar — may Allah be pleased with him). For an overview of the five pillars, see our article on the 5 pillars of Islam.
Despite its central importance, Zakat remains poorly understood by many Muslims. How much should I pay? When does Zakat become obligatory? Which assets does it apply to? Who should receive it? This guide answers all these questions with evidence from the Quran and authentic Sunnah.
خُذْ مِنْ أَمْوَالِهِمْ صَدَقَةً تُطَهِّرُهُمْ وَتُزَكِّيهِم بِهَا
“Take charity from their wealth to purify and bless them.”
— Surah At-Tawbah (9:103)
📋 Table of contents
- What is Zakat?
- The importance of Zakat in the Quran and Sunnah
- Conditions that make Zakat obligatory
- Nisab: the minimum threshold
- How to calculate Zakat
- Assets subject to Zakat
- The 8 categories of Zakat recipients
- Zakat al-Fitr vs Zakat al-Maal
- The difference between Zakat and Sadaqah
- Frequently asked questions (FAQ)
- Sources and references
1. What is Zakat?
The word “Zakat” (زَكَاة) comes from the Arabic root “zaka” which means “to purify”, “to grow” and “to bless”. By paying Zakat, a Muslim purifies their wealth of greed and excessive attachment to material possessions, and Allah causes their remaining wealth to grow through His blessing.
From the perspective of Islamic jurisprudence (fiqh), Zakat is obligatory charity (fard) collected annually from the wealth of every Muslim whose assets reach a minimum threshold called Nisab, after the passage of a complete lunar year (Hawl). It is not voluntary charity: it is a duty prescribed by Allah and a right of the poor over the wealth of the well-off. Allah says: “In their wealth was a right for the beggar and the deprived.” (Surah Adh-Dhariyat, 51:19).
2. The importance of Zakat in the Quran and Sunnah
In the Quran
Zakat is mentioned more than 80 times in the Quran and is almost always directly associated with prayer (Salat), showing how closely connected and fundamental these two obligations are. Among the most important verses are:
“Establish prayer, pay Zakat and bow with those who bow.” (Surah Al-Baqarah, 2:43)
“Establish prayer and pay Zakat. Whatever good you send ahead for yourselves, you will find it with Allah, for Allah sees all that you do.” (Surah Al-Baqarah, 2:110)
Allah also warns those who refuse to pay Zakat: “Give those who hoard gold and silver and do not spend them in the way of Allah the news of a painful punishment. On the day these treasures are heated in the fire of Hell and their foreheads, sides and backs are branded with them: this is what you hoarded for yourselves. Taste what you used to hoard!” (Surah At-Tawbah, 9:34–35)
In the Sunnah
The Prophet ﷺ repeatedly emphasised the obligation of Zakat. When he sent Mu‘adh ibn Jabal (may Allah be pleased with him) to Yemen, he told him: “Inform them that Allah has prescribed charity [Zakat] from their wealth, taken from the rich among them and given to the poor among them.” (Narrated by Al-Bukhari, no. 1395, and Muslim, no. 19).
After the Prophet’s ﷺ death, some Arab tribes refused to pay Zakat. Abu Bakr As-Siddiq (may Allah be pleased with him), the first caliph, firmly declared: “By Allah! I will fight anyone who distinguishes between prayer and Zakat! Zakat is the right due on wealth. By Allah! If they withheld from me even a camel rope that they used to give to the Messenger of Allah, I would fight them for withholding it!” (Narrated by Al-Bukhari, nos. 1399–1400, and Muslim, no. 20). This historical event shows that Zakat is not optional — it is a pillar as fundamental as prayer.
3. Conditions that make Zakat obligatory
Zakat is not obligatory for everyone. Five conditions must be met for it to become a duty:
1. Being Muslim: Zakat is a religious obligation that applies only to Muslims.
2. Being free: Historically, an enslaved person did not own their own property. This condition no longer applies in the present context.
3. Possessing the Nisab: Wealth must reach or exceed the minimum threshold (Nisab), equivalent to 85 grams of gold or 595 grams of silver.
4. Hawl (a complete lunar year): This wealth must have remained above the Nisab for a complete lunar year of 354 days. The Prophet ﷺ said: “No Zakat is due on money until a year has passed.” (Narrated by Abu Dawud, no. 1572, authenticated by Al-Albani).
5. Full ownership: The assets must be fully owned by the Muslim, with debts deducted from total wealth before calculation.
Note: according to the majority of scholars, including the Maliki, Shafi‘i and Hanbali schools, Zakat is also obligatory on the wealth of children who have not reached puberty and people lacking mental capacity, provided the Nisab is reached. Their legal guardian pays it on their behalf. Hanafi scholars, however, consider puberty and mental capacity additional conditions.
4. Nisab: the minimum threshold
What is the Zakat Nisab?
The Nisab (نِصَاب) is the minimum wealth threshold above which Zakat becomes obligatory. It is based on the value of two precious metals specified by the Prophet ﷺ:
| Metal | Prophetic unit | Equivalent in grams |
|---|---|---|
| Gold | 20 dinars | 85 grams of pure gold (24 carat) |
| Silver | 200 dirhams | 595 grams of pure silver |
The gold Nisab is based on the Prophet’s ﷺ hadith narrated by ‘Ali ibn Abi Talib (may Allah be pleased with him): “You have nothing to pay [in Zakat] on gold until you possess 20 dinars. When you possess 20 dinars and a lunar year has passed, you must pay half a dinar in Zakat.” (Narrated by Abu Dawud, no. 1572). The silver threshold is established by the hadith: “No Zakat is due on less than five awaq of silver.” (Narrated by Al-Bukhari, no. 1459, and Muslim, no. 979, from Abu Sa‘id al-Khudri). Five awaq are equivalent to 200 dirhams, or approximately 595 grams of silver.
Which threshold should you use: gold or silver?
Today, the values of gold and silver differ considerably. The silver-based Nisab produces a much lower threshold than the gold-based Nisab. Scholars differ on this question: many contemporary scholars recommend using the gold Nisab of 85 grams, because it better represents a genuine wealth threshold in the current economic context. Hanafi scholars tend to favour the silver threshold because it is lower and allows more people to contribute to solidarity. Both opinions are valid — consult a trusted scholar to determine which is appropriate for your situation.
5. How to calculate Zakat
The basic formula
The Zakat rate on monetary and trading wealth is 2.5% , or 1/40 of eligible wealth. The formula is simple:
Net eligible wealth × 2.5% = Zakat due
A practical example
Suppose you live in Canada and gold costs CAD $100 per gram. The Nisab, 85 grams × $100, is therefore CAD $8,500. If your total eligible savings, after deducting debts, are $15,000 and this amount has been held for a lunar year, your Zakat will be: 15,000 × 2.5% = $375.
Steps for calculating your Zakat
Step 1: Determine the current Nisab by checking the price per gram of 24-carat gold and multiplying it by 85.
Step 2: Calculate your total eligible wealth: savings, gold, silver, investments, trading assets, cryptocurrencies and so on.
Step 3: Subtract your immediate debts and financial obligations.
Step 4: If the result exceeds the Nisab and this amount has been held for one Hawl, a lunar year, multiply it by 2.5%.
Step 5: Pay the resulting amount to one or more of the eight categories of recipients mentioned in the Quran.
6. Assets subject to Zakat
Zakat does not apply to every asset. Here are the main categories:
✅ Assets subject to Zakat:
• Cash savings (bank accounts and cash)
• Gold and silver (gold jewellery according to the majority of scholars, bars and coins)
• Financial investments (shares held for returns, funds and compliant bonds)
• Trading assets (goods intended for sale and inventory)
• Cryptocurrencies (considered financial assets by contemporary scholars)
• Agricultural crops (at a different rate: 5% if irrigated, 10% if rain-fed — narrated by Al-Bukhari, no. 1483)
• Livestock (camels, cattle and sheep, according to specific schedules in the Sunnah)
❌ Assets NOT subject to Zakat:
• Your primary home
• Your personal car
• Clothing and personal belongings
• Household furniture
• Work equipment (a work computer, machinery and so on)
• Property not intended for trade (a home rented out for income — Zakat then applies to the rental income, rather than the property’s value)
Note on gold jewellery: according to the Hanafi school, gold jewellery worn by women is subject to Zakat if it reaches the Nisab. The Maliki and Shafi‘i schools exempt it if it is worn regularly and within customary limits. Opinions within the Hanbali school differ on this subject. Consult a scholar about your specific situation.
7. The 8 categories of Zakat recipients
Allah has precisely and exhaustively defined the eight categories of people eligible to receive Zakat. These categories are mentioned in a single verse, and no other recipients may be added:
إِنَّمَا الصَّدَقَاتُ لِلْفُقَرَاءِ وَالْمَسَاكِينِ وَالْعَامِلِينَ عَلَيْهَا وَالْمُؤَلَّفَةِ قُلُوبُهُمْ وَفِي الرِّقَابِ وَالْغَارِمِينَ وَفِي سَبِيلِ اللَّهِ وَابْنِ السَّبِيلِ
“Charity is only for the poor, the needy, those who administer it, those whose hearts are to be won over, freeing slaves, those burdened by debt, the cause of Allah and stranded travellers. This is an obligation imposed by Allah, and Allah is All-Knowing, All-Wise.”
— Surah At-Tawbah (9:60)
1. Al-Fuqara’ (الفُقَرَاء) — The poor: Those who have nothing or almost nothing to meet their essential needs.
2. Al-Masakin (المَسَاكِين) — The needy: Those who have an income that is insufficient to cover their basic needs. In a hadith in Sahih Al-Bukhari (no. 1479), the Prophet ﷺ described the truly needy person as someone who does not have enough to support themselves, whose poverty is not apparent to others, and who does not ask people for charity.
3. Al-‘Amilin ‘alayha (العَامِلِين عَلَيْهَا) — Zakat administrators: Those employed to collect, administer and distribute Zakat.
4. Al-Mu’allafat Qulubuhum (المُؤَلَّفَة قُلُوبُهُم) — Those whose hearts are to be won over: New converts to Islam who need support to strengthen their faith, or non-Muslims whose goodwill is sought for the benefit of the community.
5. Fi-r-Riqab (فِي الرِّقَاب) — Freeing slaves: Historically, this category was used to buy the freedom of enslaved people. Today, some scholars apply it to victims of human trafficking or people unjustly imprisoned.
6. Al-Gharimin (الغَارِمِين) — Those in debt: Those burdened by debt and unable to repay it, provided the debt was not incurred for prohibited purposes.
7. Fi Sabilillah (فِي سَبِيلِ اللَّه) — In the way of Allah: Primarily to support efforts to defend Islam. Some contemporary scholars extend this category to Islamic education, mosque construction and da‘wah, inviting people to Islam.
8. Ibn As-Sabil (ابْنِ السَّبِيل) — The stranded traveller: Someone who is travelling and finds themselves without resources, even if they are well-off in their home country.
Important: Zakat cannot be given to one’s own parents or other ancestors, or to one’s children or other descendants, because a Muslim is already obliged to support them. According to the majority of scholars, it cannot be given to a spouse either. However, it may be given to brothers, sisters, uncles, aunts, cousins, nephews and nieces if they are in need. The Prophet ﷺ indicated that giving Zakat to a relative in need brings a double reward: the reward of charity and the reward of maintaining family ties. (Narrated by Al-Bukhari, no. 1466, and Muslim, no. 1000).
8. Zakat al-Fitr vs Zakat al-Maal
These two types of Zakat should not be confused, as they follow different rules:
| Criterion | Zakat al-Maal (on wealth) | Zakat al-Fitr (at the end of fasting) |
|---|---|---|
| When? | Throughout the year, after a complete Hawl | Before the Eid al-Fitr prayer |
| Who? | Those who possess the Nisab | Every Muslim, including children |
| Amount | 2.5% of eligible wealth | One Sa‘ (approximately 2.5 kg) of food per person |
| On what? | Wealth (savings, gold and trading assets) | Per person (each family member) |
| Purpose | Purifying wealth and annual solidarity | Purifying the fasting person and feeding the poor on Eid |
The Prophet ﷺ prescribed Zakat al-Fitr: “The Messenger of Allah ﷺ made Zakat al-Fitr obligatory as one Sa‘ of dates or one Sa‘ of barley for every Muslim, enslaved or free, male or female, young or old. He instructed that it be paid before people went out for the [Eid] prayer.” (Narrated by Al-Bukhari, no. 1503, and Muslim, no. 984, from Ibn ‘Umar).
9. The difference between Zakat and Sadaqah
| Criterion | Zakat | Sadaqah |
|---|---|---|
| Status | Obligatory (fard) | Voluntary (mustahabb) |
| Amount | Fixed (2.5%) | Any amount, without a limit |
| Recipients | Only the 8 Quranic categories | Anyone, including family |
| Frequency | Annually | At any time |
| Conditions | Nisab + Hawl required | No conditions |
Sadaqah is strongly encouraged in Islam and can take many forms. The Prophet ﷺ said: “Every good deed is Sadaqah.” (Narrated by Al-Bukhari, no. 6021, and Muslim, no. 1005). Even a smile, a kind word or removing an obstacle from a path is considered a form of Sadaqah.
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❓ Frequently asked questions
Frequently asked questions
When should I pay my Zakat?
Zakat is due once a year, after a complete lunar year (Hawl) has passed from the day your wealth reached or exceeded the Nisab. Many Muslims choose to pay it during Ramadan to benefit from multiplied rewards, but this is not obligatory. What matters is observing the anniversary of your own Hawl.
Do I have to pay Zakat if I have debts?
If your immediate debts, those due within the year, exceed your wealth, you are not required to pay Zakat. However, long-term debts, such as a mortgage, are not deducted in full. Only the portion due in the current year is subtracted from your total wealth before calculation, according to the majority of contemporary scholars.
Does Zakat apply to cryptocurrencies?
Yes. According to the majority of contemporary scholars, cryptocurrencies are considered financial assets and are subject to Zakat at 2.5% if their value reaches the Nisab and they are held for a complete Hawl. Their value is calculated at the market price on the day Zakat is due.
Can I give my Zakat to a mosque or organisation?
Zakat must be given to the eight categories of recipients mentioned in verse 9:60. Giving to a mosque for construction or maintenance is not accepted as Zakat according to the majority of scholars, except where it falls under the category “in the way of Allah” according to some opinions. It is safer to give it directly to the poor and needy, or to a trusted charity that distributes it to eligible recipients.
What is the difference between the gold and silver Nisab?
The gold Nisab is equivalent to 85 grams of pure gold, while the silver Nisab is 595 grams of pure silver. Because silver has depreciated considerably relative to gold, the two thresholds differ greatly in monetary value. Many contemporary scholars recommend the gold threshold because it better reflects a genuine wealth threshold. Consult a scholar to determine the threshold appropriate to your situation.
Do I have to pay Zakat on my gold jewellery?
This depends on the school of Islamic law you follow. Hanafi scholars consider all gold jewellery subject to Zakat if it reaches the Nisab. Maliki and Shafi‘i scholars exempt it if it is worn regularly and within customary limits. Consulting a trusted scholar about your personal situation is recommended.
Sources and references
Quran:
Surah Al-Baqarah (2:43) — Establish prayer and pay Zakat
Surah Al-Baqarah (2:110) — Whatever good you send ahead, you will find it with Allah
Surah At-Tawbah (9:34–35) — Punishment for those who hoard gold and silver
Surah At-Tawbah (9:60) — The eight categories of Zakat recipients
Surah At-Tawbah (9:103) — Take purifying charity from their wealth
Surah Adh-Dhariyat (51:19) — In their wealth was a right for the beggar and the deprived
Hadiths:
Sahih Al-Bukhari (no. 8) and Muslim (no. 16) — Islam is built upon five pillars (from Ibn ‘Umar)
Sahih Al-Bukhari (no. 1395) and Muslim (no. 19) — The Prophet ﷺ sends Mu‘adh to Yemen: Zakat taken from the rich for the poor
Sahih Al-Bukhari (nos. 1399–1400) and Muslim (no. 20) — Abu Bakr fights those who refuse to pay Zakat
Sahih Al-Bukhari (no. 1459) and Muslim (no. 979) — No Zakat on less than five awaq of silver (from Abu Sa‘id al-Khudri)
Sahih Al-Bukhari (no. 1466) and Muslim (no. 1000) — Double reward for Zakat given to a relative
Sahih Al-Bukhari (no. 1479) — The truly needy person (al-miskin)
Sahih Al-Bukhari (no. 1483) — Zakat rates on crops: 10% for rain-fed crops, 5% for irrigated crops
Sahih Al-Bukhari (no. 1503) and Muslim (no. 984) — Zakat al-Fitr prescribed by the Prophet ﷺ (from Ibn ‘Umar)
Sahih Al-Bukhari (no. 6021) and Muslim (no. 1005) — Every good deed is Sadaqah
Sunan Abu Dawud (no. 1572) — The gold and silver Nisab (from ‘Ali ibn Abi Talib), authenticated by Al-Albani
Further references:
An-Nawawi, Sharh Sahih Muslim — Commentary on the hadiths about Zakat
Ibn Qudama, Al-Mughni — Comparative jurisprudence on Zakat
Al-Qardawi, Fiqh al-Zakat — A contemporary reference on the jurisprudence of Zakat
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