Zakat
Almsgiving — Hanafi Fiqh
What is Zakat?
Zakat is the obligatory act of worship where a Muslim gives 2.5% of their excess wealth annually to specified categories of people. It is the third pillar of Islam and is both a spiritual purification and a social obligation. The Quran states: "Establish prayer and give Zakat and bow with those who bow." (Surah Al-Baqarah 2:43)
Zakat serves two purposes: purifying the soul from greed and attachment to wealth, and purifying the community by redistributing wealth to those in need. The Prophet ﷺ said: "Charity does not decrease wealth."
Nisab — The Threshold
Gold & Silver
Nisab for gold: 87.48 grams (20 dinars)
Nisab for silver: 612.36 grams (200 dirhams)
Use whichever is lower — typically silver nisab applies to most people.
Cash & Investments
If your total cash and investable assets equal the value of silver nisab (approx. 612g of silver, or roughly $250–350 USD depending on market), you owe zakat on that amount at 2.5%.
Business goods are assessed at market value, not purchase price. Debts owed to you are counted in your wealth only if they are likely to be repaid.
What is Subject to Zakat?
Cash & Bank Balances
All cash, current accounts, savings, and digital wallet balances above nisab.
Gold & Silver
All gold and silver jewellery, bullion, and coins above nisab threshold.
Business Inventory
Goods held for sale, valued at current market price, not original cost.
Livestock (Cattle, Sheep, Goats)
Zakat is due on grazing livestock above certain thresholds. Specific rules apply per head of animals.
Agricultural Produce
Harvested crops and fruits — 10% if rain-fed, 5% if irrigated. Applies when above nisab in value.
Mineral Resources
When extracted and sold, approximately 20% is subject to zakat (haqq al-ma'adin).
What is NOT Subject to Zakat
Primary residence (one home lived in), one personal vehicle, household furniture and appliances, tools used for work, and debts that are unlikely to be recovered. Zakat is also not due on wealth you have owned for less than one lunar year (hawl).
Who Receives Zakat?
The Quran (Surah At-Tawbah 9:60) specifies eight categories:
Fuqara (The Poor)
Those whose wealth is below nisab — unable to meet their basic needs
Masakin (The Needy)
Those who have some wealth but not enough to meet their basic needs
Zakat Administrators
Those appointed to collect, distribute, and manage zakat funds
New Muslims
Those who recently accepted Islam and need help integrating
Slaves & Captives
Those working toward freedom or those held captive
The Debt-Burdened
Those in debt who cannot repay without hardship
In the Path of Allah
Fighters, volunteers, and workers in Allah's cause
Travellers
Stranded travellers who need assistance to reach their destination
Note: Zakat cannot be given to one's direct dependents (spouse, children, parents) who are already one's financial responsibility. It is also not permitted to give to non-Muslims in the Hanafi school (some other schools permit it for dawah purposes).
Zakat Calculation Summary
The Formula
Zakat = (Total Wealth − Debts) × 2.5%
Only wealth above nisab that has been held for a full lunar year (hawl) is subject to zakat.
Step-by-Step
- List all your assets (cash, gold, silver, business goods, investments)
- Subtract all outstanding debts you owe
- Check if the remaining amount exceeds nisab (silver rate)
- If yes and you have held it for one year, calculate 2.5%
- Give to any eligible recipient of your choice
Quick Example
Cash savings: $10,000 | Gold jewellery worth: $5,000 | Debts owed: $2,000
Net wealth: $13,000. If above nisab ($250–350) and held for one year:
Zakat due: $13,000 × 0.025 = $325
Related Fiqh References
HanafiThese references show where related Hanafi rulings are indexed in the SeekDeen fiqh database. Detailed lesson explanations are being reviewed separately.
Have a question about zakat?
Ask SeekDeen about your specific calculation, nisab, or who to give to.