Nisab is the threshold for which a Muslim’s personal wealth must be above if he or she is to be eligible to pay Zakat. There are two Nisab values from which the threshold is determined, which are:

• Gold – the monetary value of 87.48 grams of gold
• Silver – the monetary value of 612.36 grams of silver

Because the valuation of gold and silver fluctuates so, too, does the Nisab threshold. This is why tools such as our Zakat calculator prove so helpful as they help Muslims to quantify not only whether they qualify to pay Zakat, but how much it is they owe. A Muslim’s wealth must exceed the Nisab threshold for one full Islamic year, or ‘Hawl’, which is the term for a lunar year, which lasts for 354 days.

Your wealth or net assets can be summed up as the liquid assets you possess minus your short term liabilities.

Liquid assets are those that can be transformed into cash very easily. Short term liabilities include your bills, rent, personal loans and credit card debts. Most scholars agree that any mortgage that you may hold, should not be included in that calculation.

Here’s a list of things that should be included in your assets:

• Cash in the bank and at home
• Cash saved for any special purposes e.g. wedding, Hajj, car purchase, etc.
• The value of gold and silver you own
• The value of shares at their market price
• Money owed to you, which is highly likely to be repaid
• If you own a business, the balance sheet value of the stock(s) you possess.
• If you own properties, any rental income that has been saved

You do not need to count the value of your home or land as part of your assets. You also don’t need to include person items, such as a car, clothing, home appliances, etc. as part of your assets.

If you own investment properties (to buy / to let), then any saved rental income will be a part of your assets. The equity value of your investment property portfolio is not included as part of your assets in the Zakat calculation.

If an investment property is due to be sold around your Zakat due date, then the anticipated profit is to be included as part of your assets.

Here is a list of things that should be included in your liabilities:

• The money you owe to others i.e. personal loans (from banks and friends), credit card debts, etc.
• Current month’s rent/mortgage payment or arrears
• Bills that are due
• If you own a business, then business expenses e.g. rent, rates, salaries, utility bills, etc.
• Short term business loans and overdraft amounts are included in your liabilities.

The calculation for your wealth/net assets is:

• Assets – short term liability = your wealth.

As long as your wealth is above the nisab of the day, you are eligible to pay Zakat

According to the Hanafi madhab, all gold and silver you own must be included as part of your wealth/assets in the Zakat calculation.

In the Shafi madhab, however, any gold and silver that is for personal use do not need to be included as part of your wealth/assets.

If all of your wealth is in gold, the value of the gold you own must be at – or above – the gold nisab in order to be eligible to pay Zakat.

If your wealth is a mixture of gold and/or silver and cash, it is preferable to use the silver nisab threshold.

Many scholars hold the view that it will be highly beneficial to include all gold and silver that you own as part of your wealth/assets, regardless of whether they are for personal use or not.

Any goods, other than gold or silver, that you have not bought for resale are non-zakatable. No zakat is payable on your personal belongings, such us a house or a car.

The business stock has to be counted as an asset for Zakat purposes. The value to be used is what would appear on your balance sheet. Usually, it is the cost of purchasing the stock.

Business premises do not need to be counted as an asset in the calculation. Any property the business owns (land, retail units, etc.) also do not need to be counted as assets.

A long-term mortgage is not to be counted as a liability in your Zakat calculation.

Loans that are taken out for personal purposes can be subtracted as a liability in the Zakat calculation

Gold and Silver: Any gold or silver you possess is zakatable, including jewellery according to Hanafi school, because these two metals have intrinsic monetary value.

Other precious metals and stones are not zakatable unless they were acquired for the purpose of trade.

Cash or its Equivalent: Cash at home, in bank accounts, savings, money lent to others,saving certificates, bonds, shares, investment certificates and so on, are all taken into account when calculating zakat.

Stock Purchased for Trade: Any goods you have bought with the intention of selling are included in your zakatable wealth.

For a donation to qualify as zakat, there must be a clear intention present, either when you separate the zakat money from the rest of your wealth, or when you make the zakat payment.

Yes, zakat can be paid in advance before the year has ended, but you should make sure you have wealth equal to or above the nisab.

Not according to the Hanafi school. A child is not liable to pay zakat, even if in possession of wealth above the nisab threshold. For a child who possesses the nisab or more, the first zakat payment will become due twelve lunar months reaching the age of puberty.

According to both Imam Shafi’ and Imam Malik however, a child who possesses wealth above the nisab value is liable for zakat.

Assets that are included in the Zakat calculation are cash, shares, pensions, gold and silver, business goods, crops and cattle and income from investment property.

Personal items such as home, furniture, cars, food and clothing (unless used for business purposes) are not included.

Yes, zakat can be paid monthly by setting up a regular monthly payment such as a direct debit