How this app calculates Zakat

What is the nisab threshold? #

The calculator treats Zakat as due once your net zakatable wealth reaches the nisab threshold. The threshold is a fixed weight of gold or silver, valued at the current market rate.

The weights are 87.48 g of gold (about 7.5 tola) and 612.36 g of silver (about 52.5 tola). These weights are agreed across the four Sunni schools.

When your wealth is mixed, such as cash, gold, silver and business assets together, the calculator uses the silver threshold. It is the lower of the two, so more people qualify to pay. This is the Hanafi position.

The app lets you switch to the gold threshold instead. That raises the threshold, and it can change whether Zakat is due at all. Silver stays the default.

What rate does the calculator apply? #

The calculator applies a rate of 2.5%, one-fortieth (1/40), to your whole net zakatable wealth.

Net zakatable wealth is what you own that counts for Zakat, minus the debts that can be deducted.

The rate is applied only when that net amount meets the threshold. Below the threshold, the calculator shows no Zakat due.

This rate is agreed across the four schools.

How are gold and silver counted? #

All gold and silver jewelry is counted, whether you wear it every day or keep it stored. This is the Hanafi position, and it is the main point where the calculator differs from the Shafi'i school.

Gold and silver are valued on their full weight (کل وزن) at the current market rate. This follows Hanafi practice and the Jamia Ashrafia form.

The karat you enter is kept for your own reference. It never reduces the amount counted.

For example, 100 g of 22 karat gold is valued as 100 g, not as 91.67 g.

How are shares, funds and crypto counted? #

Shares, mutual funds and ETFs are counted at 100% of their current market value. The calculator treats them as trade goods (māl al-tijārah).

This follows Mufti Taqi Usmani's position that the full market value of a share is zakatable. It applies whether you hold the investment for the long term or trade it actively.

Bonds and cryptocurrency are also counted at their full value.

The app's rules list this valuation as a judgment call, open to revision with scholarly input.

Which school does the calculator follow? #

The calculator follows the Hanafi school only. There is no setting to choose another school.

The app's owner checked its Hanafi positions against the Zakat self-assessment form of Jamia Ashrafia, Lahore.

If you follow another school, some of the results may not apply to you. The clearest difference is jewelry. The Shafi'i school exempts jewelry that is worn personally. This calculator counts it.

This is a calculation aid, not a fatwa.

What is deducted? #

Debts due within about a year are subtracted from your zakatable wealth before the threshold and the rate are applied. This follows the Hanafi position on which debts can be deducted. The calculator deducts six kinds:

Debts due within one year.
The part of a long-term debt due in the next twelve months.
Credit-card balances.
Unpaid Zakat from previous years.
Tax owed.
Business debts due within one year.

Money owed to you is treated as an asset, not a debt. If you expect to get it back, it is counted. If you do not expect it back, it is not counted, and Zakat is due on it only if it is recovered.

What is not counted? #

Things you own for personal use are not counted: the home you live in, a car you use for transport, furniture and clothing. The calculator does not ask about them at all. This is an agreed Sunni position.

The value of property itself is not counted. Only rental income you have saved, or property you hold for sale, is counted.

A year of expected future living expenses is not deducted. The Hanafi list of deductible liabilities gives no basis for it.

Where does this app simplify? #

The calculator does not check hawl, the requirement that wealth has been held for one lunar year. It treats everything you enter as if the year is complete.

If some of your wealth was acquired recently and has not been held for a year, the result can be higher than what you actually owe. The calculator does this to keep the questions simple. It assumes most people calculate on their annual Zakat date, when the year is already complete.

Ushr, the Zakat on agricultural produce, is not calculated. This is a deliberate choice for this release, not an oversight. If you farm, do not rely on this calculator for Zakat on your crops.

Two other items are listed in the app's rules as open to revision with scholarly input: counting shares and funds at full market value, and letting you switch the threshold from silver to gold.

Sources #

The main reference is the Zakat self-assessment form of Jamia Ashrafia, Lahore. The app's owner checked the calculator's Hanafi positions against it.

The silver threshold for mixed wealth, the counting of jewelry and the list of deductible debts follow classical Hanafi positions.

The valuation of shares, mutual funds and ETFs follows Mufti Taqi Usmani.

This is a calculation aid, not a fatwa. If your situation is unusual, ask a qualified scholar.