Zakat is one of the five pillars of Islam, an act of worship that purifies your wealth and brings blessings to your life. For Muslims in the UK and across the world, zakat is more than just a financial obligation, it is a way of uplifting widows, orphans, and vulnerable families in places like Kashmir who rely on your generosity for survival.
This step-by-step guide will help you calculate zakat accurately, understand its importance, and ensure that your wealth is shared with those who need it most.
Step 1: Understanding the Nisab
Zakat becomes obligatory only when your wealth reaches a certain minimum threshold known as Nisab. Nisab is measured against the value of either gold or silver.
- Gold Nisab: The equivalent of 87.48 grams of gold.
- Silver Nisab: The equivalent of 612.36 grams of silver.
Since gold and silver prices fluctuate, the Nisab amount changes. Many scholars recommend using the silver Nisab because it benefits more people in need.
Example: If silver is valued at £0.60 per gram, the Nisab would be approximately £367.
Step 2: Identify Zakatable Assets
Not all possessions are zakatable. Zakat applies to wealth that grows or has the potential to grow. Eligible assets include:
- Cash (in hand or in bank accounts).
- Gold and silver jewellery (beyond personal minimum use).
- Business assets and inventory.
- Investment shares, stocks, and savings.
- Agricultural produce and livestock (where applicable).
Exempt assets: Your home, car, clothing, and essential personal belongings are not included.
Step 3: Calculate the Total Value of Assets
Add up the value of all your zakatable assets.
Example:
- Cash savings: £6,000
- Gold jewellery: £3,000
- Business stock: £1,000
Total = £10,000
Step 4: Deduct Liabilities
Before calculating zakat, subtract debts and obligations that must be repaid within the same lunar year. This can include:
- Personal loans.
- Credit card bills.
- Outstanding business payments.
Example:
If you owe £2,000 in debts, then:
£10,000 – £2,000 = £8,000 net zakatable amount.
Step 5: Apply the Zakat Rate
Zakat is fixed at 2.5% (1/40th) of your net zakatable assets.
Example:
Net zakatable amount: £8,000
Zakat due: £8,000 × 0.025 = £200
Step 6: Distribute Your Zakat
Zakat can only be given to eligible recipients as outlined in the Qur’an (9:60). This includes:
- The poor and needy.
- Orphans and widows.
- Those in debt.
- Travellers in difficulty.
Today, many Muslims choose to fulfil their zakat through trusted charities like Kashmir Welfare Foundation, ensuring their donations reach widows, orphans, and vulnerable families in Azad Kashmir and Pakistan.
Why Paying Zakat Matters
Zakat is not simply about numbers, it is about lives.
- A widow in Bhimber receiving a food pack from your zakat can feed her children for a month.
- An orphan in Muzaffarabad can stay in school because your zakat covers his education.
- A disabled man in Neelum receives a wheelchair, restoring dignity and mobility, because someone chose to give zakat.
Your zakat transforms despair into hope. By donating through Kashmir Welfare Foundation, you are fulfilling your obligation while directly changing lives in Kashmir.
Using an Online Zakat Calculator
Manually working out zakat can be complex. That is why many UK Muslims now use an online zakat calculator.
The Kashmir Welfare Foundation Zakat Calculator automatically accounts for the latest Nisab value, helping you determine how much zakat is due based on your assets and liabilities.
FAQ on Zakat
1. Do I have to pay zakat every year?
Yes, zakat must be paid once every lunar year if your wealth remains above the Nisab threshold.
2. Can zakat be given to family members?
You may give zakat to poor relatives, such as cousins or distant family, but not to immediate dependents like your parents, spouse, or children.
3. Is zakat due on my home or car?
No, zakat is not payable on personal essentials such as your house, car, or everyday belongings.
4. When is the best time to pay zakat?
While zakat can be given any time of the year, many Muslims choose Ramadan for the multiplied blessings.
5. What if I forget to pay zakat in previous years?
You are still obliged to calculate and pay missed zakat. It is better to make up for past dues as soon as possible.
