Understand your true Zakat
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Select Your Currency
Know the Niṣāb
The niṣāb is the minimum liable amount that a Muslim must have to be obligated to pay Zakat. This amount was set by our Prophet Muhammad (S) at 21 ounces of Silver. Based on today's price of Silver per ounce, the niṣāb is $ 318.23. We will automatically let you know if you're under the niṣāb amount. Note: we will not be using the gold nisab calculation in this calculator to stay true to Sheikh Joe Bradford's method.
Understand the Hawl
The hawl is the the Zakat Year, like a fiscal year, but used to calculate your Zakat. The hawl starts when your assets first reached the minimum niṣāb, or when you last paid Zakat. Once 1 lunar year has passed, and your assets have been consistently above the niṣāb, you pay Zakat on your assets at that point:
You, Your Spouse, & Children
Zakat is due by any person who owns the wealth, whether man, woman, or child if they possess above the nisab. If you choose, you can pay Zakat on behalf of your family, in which case, make sure to sum the total for each individual in the following questions.
Which of these apply to your financial picture?
This allows us to ask you the right Zakat questions. If you're not sure, select the box and you can leave the question blank later when we provide explanations.
What's your email address?
You can send a receipt of your calculation to yourself after this session, so you can save this year's Zakat calculation date and your Zakat amount. All of your data is kept private and secure.
Let's get started with the assets that you will be paying Zakat on first. Later, we will cover debts and payments that may reduce your Zakatable amount.
Checking Accounts 💵
What is the total value of all of your checking account(s)?
Savings Accounts 👛
What is the total value of all of your savings account(s)?
What is the total value of your physical cash on hand/wallet?
10-11. Precious Metals 💍
The only precious metals that Zakat is due on are silver and gold. This includes jewelry, utensils, and other items you may own.
Zakat is NOT due on any of the jewels IN your gold or silver jewelry. So you would not pay any zakat on a platinum and diamond ring, for example. You need to find the weight of the pure silver/gold, and not any other metal mixed in. Since this isn't easy, you may need to have them measured by a jeweler.
Here are the differences between madhabs on jewelry:Hanafi: Value of all used & unused gold & silver jewelryMaliki: Value only of unused gold & silver jewelryShafi'i: Value only of unused gold & silver jewelry owned by men
We will use the price of pure silver at $ per oz, current as of April 22, 2020 (source). Alternatively, you can provide the value of your silver in $. If you provide both, we will add them together for you.
We will use the price of pure gold at $ per oz, current as of April 22, 2020 (source). Alternatively, you can provide the value of your gold in $. If you provide both, we will add them together for you.
Active Investments & Cryptocurrencies 📈
An "active" investment is a stock, fund, or currency that you hold for a short period of time (e.g. less than 365 days). You will treat these shares the same way you would if you had them as cash in your pocket via their market value. This includes the market value of cryptocurrencies and tokens with some exceptions.
Unvested RSUs, ESPP, or shares you cannot sell without restrictions are not subject to Zakat. Don't forget to include the cash in your brokerage account(s) here if you haven't already done so above.
Passive Investments 📊
This section applies to the stocks you plan on holding long-term (i.e. more than 365 days). You most likley will end up paying slightly less Zakat by treating them as passive investments, so you can choose to simplify by treating it as an Active Investment if you prefer.
To properly calculate the Zakat on passive investments, you will need to access each company's balance sheet, and look at the Current Assets and Shares Issued.
Here's the good news: We do this automatically for more than 600 common stocks!
You can use this search bar to lookup stocks, which will be added automatically to the table. If a stock doesn't autocomplete,
then it does not currently exist in our database. Send us its name, and we can add it!
You can find the relevant information at Yahoo! Finance or Morningstar. Here are the numbers to note: Current Assets and Shares Issued. For example, here's the info on MSFT from Yahoo! Finance. Along with the Number of Shares You Own, we can calculate the effective value of your assets of the company, which becomes part of your net assets.
Note: this is very difficult to calculate for mutual funds, ETFs, or index funds that consist of multiple stocks constantly shifting positions, so we recommend simply treating them as active investments (and adding their cash value to the previous question).
If you received dividends from your financial investments, add the total amount received over the hawl here. If you have already added your dividends to your general checking or savings accounts, do not double count the earnings here.
Roth IRA contributions 🎂
You pay Zakat on what is in your full control. So, if you are below the age of 59 and a half, you will pay this only on your Roth IRA contributions, since that money is accessible to you. If you are above that age, the earnings (greater than 5 years old) are also accessible for you. Therefore, if you are above the age of 59 and a half, you should pay on your total Roth value (and subtract any earnings less than 5 years old).
401(k) withdrawals 👴
Sheikh Bradford advises not paying Zakat on your 401k if you are under 59.5 years of age, because Zakat is only due on what is in your full control without penalty and managed by you. Due to other legitimate scholarly opinions, you can choose to treat your 401k/IRA like cash and pay Zakat on the value of the accounts minus taxes and penalties.
If you withdraw early, then you will pay Zakat on the NET amount after taxes (your estimated effective tax rate this year) and after penalties (10% in the US). If these distributions are already in your checking account or another account previously listed, be sure not to double count them.
If you have reached retirement age or cash out, you will pay Zakat on the entire amount after one year has passed, and then EVERY year after because you will have unfettered access to the full amount.
IRA withdrawals 👵
Treat IRA withdrawals the same way as the previous question.
ESA withdrawals 🎒
For the same reasons as the previous questions, if you've contributed to a Coverdell ESA, you will pay only on what you've withdrawn this hawl. If these withdrawal amounts are already in your checking account or another account previously listed, be sure not to double count them.
529 withdrawals 📚
For the same reasons as the previous questions, if you've contributed to a 529 College Savings Account, you will pay only on what you've withdrawn this hawl. If these withdrawal amounts are already in your checking account or another account previously listed, be sure not to double count them.
FSA / HSA Accounts 💉
You do not pay Zakat on your FSA, because you never have full control over that money (use it or lose it). But HSA funds are constantly accessible for your medical expenses, so it will fully be eligible for Zakat.
Property for sale 🏡
You do NOT pay Zakat on the equity or value of your primary residence as it's purpose is as a living expense. However, if you have a property listed for sale, pay Zakat on the amount you would earn if you sold it right now at its list price.
Vacant Property 🏚️
If you own a property, but do not have plans to use it for living or renting (e.g. holding or flipping), then you do not pay Zakat on it until it has been sold. You pay Zakat on the value received from sale of the inactive property.
If the sale price is already in your checking account or another account previously listed, be sure NOT to double count it here.
Rental Income 🏘️
If you rent a property, you do not need to pay Zakat on the equity or value of the property itself, because the property is considered a tool of your trade, rather than the result. But you do have to pay on the net rental income.
This is the total rental income you earned during the hawl minus costs associated with owning the property including mortgage, property taxes, insurance, HOA & management fees, maintenance. Note: If you added your rental income to your general checking or savings accounts, do not double count the earnings here.
Aggregate Cash Value of Inventory 📦
You pay Zakat on all of the items in your inventory, including raw ingredients and final products, that meet these conditions: (1) you hold that inventory for more than a year, (2) the inventory is not under contract, (3) you have designated that inventory for sale. In the case of a partnership, value your share of the inventory. You do not pay Zakat on your business domicile, equipment, or tools.
Business accounts 💵
Assuming you have not already included these in your earlier checking or savings accounts. In the case of a partnership, value your share.
Accounts Receivables 📥
Include the amount of money in your accounts receivable: money owed to your business for goods and services that have been delivered or used. In the case of a partnership, value your share of the accounts receivable.
Other Illiquid Investments 🖼️
If you have a piece of art or real estate that is highly illiquid and the price is not readily determinable because of how unique or rare it is, only pay Zakat on it when you sell it.
If the sale price is already in your checking account or another account previously listed, be sure not to double count it here.
Zakat on Livestock applies only to free grazing animals. If you own animals for personal use, you do not have to pay Zakat on them. If you keep any animals for sale, you'll treat them as business inventory
Good Debt (Owed to You) 🤝
Good Debt is debt that you are owed and expect to collect. If something prevents you from doing so, like the inability of a person to pay or their refusal to pay, it becomes Bad Debt. You are liable to pay Zakat on a Bad Debt when you actually receive it.
When calculating your Zakat liable amount, you can reduce your assets by your living expenses, bills that are "immediately due", and money you owe to others. If you pay your rent monthly, you can deduct one month of your rent. If you pay your insurance every 6 months, you can deduct the 6 month insurance bill.
This Month's Living Expenses 🍔
This includes: rent/mortgage payments, medical expenses (other than your insurance, which is covered below), utilities, groceries, transport, upkeep, and any other miscellaneous living expenses.
Periodic Insurance Expenses 🚗
This includes: home/renter's insurance, auto insurance, medical insurance, or any other kind of insurance that is due. If you pay monthly, deduct the monthly payment; if you pay quarterly, deduct the quarterly payment, etc.
Debts You Owe 💳
This can include student debts, credit card debts, a secondary mortgage, and any other debt payments that have become due. If you have a debt that you are paying off in installments, you should only include the upcoming installment that is due, even if you choose to pay off more. Mortgage payments on your primary residence are not a part of this category - they should be accounted for in Monthly Expenses.
Property Tax Payments 📋
You can deduct this if you are about to pay the property tax on your Primary Residence (investment properties already include this in net rental income). If you pay monthly, deduct the monthly payment; if you pay quarterly, deduct the quarterly payment, etc.
Delinquent Tax Payment 📅
This is money that you owe the government.
Miscellaneous Fines 🧾
For example, this might be parking tickets.
Important Note: There are two categories of assets which we did not cover in this calculator. (1) Farming assets that you harvest for sale (2) Haram earnings (fixed-income investments such as bonds; equity investments tainted with things like: interest, haram substances like alcohol or drugs, etc.). If you have these, please consult a specialist in Islamic Finance. We suggest scheduling a consultation with Sh. Joe Bradford, as this calculation method is his.
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On net assets: $0.00 (below nisab)
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