What Is Zakat? A Complete Beginner's Guide
The third pillar of Islam explained from zero: who pays, on what, how much, to whom — and how to work out your own amount today.
The meaning of zakat
Zakat (زكاة) literally means purification and growth. It is an annual obligatory payment of 2.5% of qualifying wealth, and one of the five pillars of Islam — mentioned alongside prayer more than twenty times in the Quran. The idea is simple and radical at once: wealth kept beyond your needs carries a right for the poor, and paying it purifies what remains.
Unlike voluntary charity (sadaqah), zakat is a duty with defined rules: a threshold (nisab), a rate (2.5%), a timing condition (one lunar year of ownership, the hawl), and specific eligible recipients.
Who must pay
Every adult, sane Muslim whose zakatable wealth stays at or above the nisab for one complete lunar (Hijri) year — roughly 354 days. There is no zakat on someone whose wealth is below the threshold; such a person may in fact be eligible to receive zakat.
What wealth is zakatable
- Cash — in hand, bank accounts, savings, and money others owe you that you expect back.
- Gold and silver — bullion, coins, and (per the Hanafi school) jewellery.
- Business assets — inventory held for sale, valued at market price.
- Investments — shares, funds and similar (rulings on how to value them vary).
Not zakatable: your home, personal car, furniture, clothes, and the tools or equipment you use to earn a living. Debts that are currently due are subtracted from your total before comparing with nisab.
The nisab threshold
Nisab is 87.48 g of gold or 612.36 g of silver, converted to your currency at today's price. For mixed wealth, most contemporary scholars recommend the lower silver standard. We cover this fully in What Is Nisab?
How to calculate it — 4 steps
- Add up all zakatable assets on your zakat date.
- Subtract debts that are currently due.
- Compare the net amount with the nisab (silver standard for mixed wealth).
- If you're at or above nisab: pay 2.5% of the whole net amount — not just the part above the line.
Example: cash 300,000 + gold worth 150,000 − debts 50,000 = 400,000 net. That's far above a typical silver nisab, so zakat = 400,000 × 2.5% = 10,000.
Who can receive zakat
The Quran (At-Tawbah 9:60) names eight categories: the poor, the needy, zakat administrators, those whose hearts are to be reconciled, freeing captives, those in crushing debt, in the cause of Allah, and stranded travellers. Zakat cannot be given to your own parents, grandparents, children, or spouse — supporting them is already your duty — and most scholars hold it should go to eligible Muslims.
When to pay
Zakat is due when your wealth completes a lunar year above nisab. Many people fix a memorable date — commonly in Ramadan, where good deeds carry extra reward — and pay annually on that date. You may also pay in advance or in installments, as long as the full amount owed is covered.
Frequently asked questions
What is zakat in simple words?
An obligatory annual charity: 2.5% of your savings and qualifying wealth, paid to the poor and other eligible recipients, once your wealth stays above the nisab for a lunar year.
Who must pay zakat?
Every adult, sane Muslim whose zakatable wealth has remained at or above the nisab for one complete lunar year.
Who can receive zakat?
The eight categories in Quran 9:60 — including the poor, the needy, debtors and stranded travellers. Not your own parents, children, or spouse.