To calculate zakat on cash, add up your liquid wealth, subtract the debts you owe right now, and pay 2.5% of what’s left, but only if that total has stayed at or above a minimum threshold called the nisab for a full lunar year. On $20,000 of qualifying cash that has sat above the nisab for 354 days, you owe $500. The arithmetic is easy. The work is deciding what counts, what comes off, and when the clock started.
Step One: Find the Nisab for This Year
The nisab is the wealth floor. Below it, you owe nothing. It’s pegged to the value of one of two metals: 87.48 grams of gold or 612.36 grams of silver.1Islamic Relief UK. Nisab Value – What is Nisab? – Zakat and Nisab Multiply the weight by the current spot price per gram to get the dollar figure. Because metal prices move daily, the nisab moves with them. As of early 2026, gold sits around $150 per gram and silver around $2.18 per gram, which puts the gold-based nisab near $13,100 and the silver-based nisab near $1,335.
Most scholars recommend the silver standard because the lower threshold pulls more wealth into circulation for people who need it.2Muslim Aid. Zakat Calculator – Simplify Your Zakat Calculation with Muslim Aid The gap between the two standards is wide right now: someone with $5,000 in savings owes zakat under silver and nothing under gold. If you’re unsure which to apply, ask a scholar you trust; the silver threshold is the more commonly used benchmark.
Step Two: Add Up Your Zakatable Cash
Take a full inventory of your liquid wealth. The core items are the obvious ones: physical currency at home, checking and savings balances, and money held in digital payment apps or online wallets. These are what most people picture when they think of zakat on cash, and they usually make up the bulk of the calculation.
A few less obvious categories also belong in the total:
- Money you’ve lent out. Personal loans to friends or family are still yours if the borrower can realistically pay you back.
- Gold and silver held as investments. Bullion, coins, and jewelry kept as a store of value get counted at current market price.
- Business cash and receivables. Cash in a business account, invoices you expect to collect, and inventory held for resale all count.
Items you use for daily life don’t count: the car you drive, the house you live in, furniture, clothing, and jewelry you actually wear. These serve personal needs rather than functioning as stored wealth.
Step Three: Subtract Debts That Are Currently Due
This is where most calculations go wrong. You don’t pay zakat on money you functionally owe someone else, but the deduction rule is narrower than people assume. Only debts that a creditor could demand payment on right now, on your zakat date, reduce your zakatable wealth.3Zakat Foundation of America. Can Home Mortgages Be Deducted from Zakat as Debt
Deductible on your zakat date: credit card balances due, utility bills currently owed, this month’s rent, the current month’s mortgage payment, and any personal loan a lender could call in full today. Also deductible: essential current living expenses like food and medical bills due at the time of calculation.
Not deductible: the full remaining balance on your mortgage, the full principal of your student loans, future car payments, or any other long-term installment obligation where the lender cannot demand the whole sum today.
The distinction matters at scale. If you owe $180,000 on a mortgage and your monthly payment is $1,500, you subtract $1,500 on your zakat date, not $180,000.3Zakat Foundation of America. Can Home Mortgages Be Deducted from Zakat as Debt The same logic covers car loans, student loans, and every other installment debt.
Step Four: Confirm a Full Lunar Year Has Passed
Zakat isn’t triggered the moment your wealth crosses the nisab. Your assets have to stay at or above the threshold for one full lunar year, called the hawl, which runs roughly 354 days.4Islamic Relief UK. Hawl The clock starts the day your zakatable wealth first reaches the nisab, and it resets if your wealth drops below it.
Because the lunar year is about 11 days shorter than the Gregorian calendar, your zakat date drifts earlier each year on a standard calendar.5Zakat Foundation of America. When Is Zakat Due Many people pick a fixed date, often during Ramadan, and use that as their annual zakat date. That’s acceptable, and it saves you from tracking the drift. What matters is that a full lunar year has passed since your wealth reached the nisab and that you’re still above it on the day you calculate.
Mid-year dips below the nisab are a point of scholarly discussion. Some positions reset the clock on any dip; others look only at the start and end dates. The safer approach: make sure your wealth is above the nisab on your calculation date and has been for the better part of the year.
Step Five: Multiply by 2.5%
Once the hawl is satisfied, the arithmetic is simple. Take your total zakatable assets, subtract your qualifying debts, and multiply the result by 2.5%. Dividing by 40 gives the same number.6Al Jazeera. A Simple Illustrated Guide to Zakat, Answers to 7 Common Questions
A worked example. Assets first:
- Checking account: $4,200
- Savings account: $12,000
- Cash on hand: $300
- PayPal balance: $750
- Loan to a friend you expect back: $2,000
- Gold jewelry held as investment: $3,000
- Total assets: $22,250
Then current liabilities:
- Credit card balance due: −$1,800
- This month’s mortgage payment: −$1,500
- Utility bills due: −$200
- Net zakatable wealth: $18,750
$18,750 sits well above the silver nisab of about $1,335, so zakat is due. Multiply by 0.025 and the payment is $468.75.7GiveDirectly. Zakat Calculator 2026 – How to Calculate Zakat Step-by-Step If the same person’s net wealth had been $1,200, it would fall below the silver nisab and no zakat would be owed.1Islamic Relief UK. Nisab Value – What is Nisab? – Zakat and Nisab
If You Missed Prior Years
Skipping a year doesn’t erase the obligation. You owe missed zakat retroactively and should pay as soon as you can. Each missed year needs its own separate calculation, because your wealth was different each year and you can’t lump the payments together.
For each missed year, reconstruct your zakatable assets as best you can from old bank statements, tax returns, or income records, then apply 2.5% to that year’s net zakatable wealth. If you can’t pin down exact numbers, estimate conservatively and round up rather than down. Every back payment should carry a specific intention identifying which year it covers. Keep paying current-year zakat alongside the back payments; if paying everything at once isn’t feasible, you can spread the catch-up amount over installments.