Zakat is an obligatory yearly payment on wealth that has grown or can grow. It applies to a Muslim whose net zakatable wealth reaches the nisab and has been held for a full lunar year, known as the hawl.
This page summarises how scholars and standard-setting bodies usually treat different kinds of investments. It does not issue a ruling. Where views differ, we describe each one. For your own case, ask a scholar or mufti you trust.
What counts as zakatable wealth
Most methods count the following:
- cash at home and in bank accounts, in any currency
- gold and silver, including jewellery under some views (see Zakat on gold)
- trade goods, meaning anything bought with the intention to resell
- money owed to you that you expect to recover
- the zakatable part of investments such as shares, funds and trading balances
Items for personal use are generally not counted. These include your home, car, furniture and tools of your work. Fixed assets a business uses to operate, such as machinery or premises, are also generally excluded.
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Nisab and the rate
Nisab is the minimum amount of wealth that makes zakat due. It is defined as a weight of gold or a weight of silver. Silver gives a much lower threshold, so more people pay under it. Many Hanafi scholars in Pakistan prefer the silver nisab when wealth is mixed (cash, shares and some gold), because it is better for the poor. Other scholars use the gold nisab for cash and investments. Both views are held by recognised scholars.
The standard rate is one-fortieth of net zakatable wealth. The calculator below applies the rate and compares your net wealth with the nisab in grams of gold or silver. You enter the current price per gram.
Fill in the empty fields to see the result.
Zakat = rate × (assets − debts) when the net wealth reaches the nisab (grams × price per gram) and a lunar year has passed. Scholars differ on details; follow the opinion you rely on.
For current gold prices see Gold in Pakistan. For rupee conversion of foreign currency balances see SBP exchange rates.
Zakat on savings
Bank balances, cash, prize bonds and the principal in savings certificates are counted at their value on your zakat date. Many people pick a fixed date, often in Ramadan, and keep it every year.
Deduction at source in Pakistan. Under the federal zakat system, banks and some savings institutions deduct zakat from certain accounts automatically. A person can file a declaration to be exempt, for example on grounds of their fiqh, and then calculate and pay zakat themselves. Rules and forms change, so check the current position with your bank or the relevant institution. If an amount was deducted at source, many scholars say you can count it against what you owe on that money.
Interest (riba) earned. Most scholars hold that interest is not lawful wealth, so it is not "purified" by paying zakat on it. Their usual advice is to give it away without expecting reward. Zakat is then paid on the principal. See Riba explained and Savings and deposits.
Zakat on stocks
Scholars first ask why you hold the shares.
Shares held for resale. If you buy shares to sell them at a gain, most methods treat them as trade goods. You pay zakat on their full market value on your zakat date.
Shares held for the long term. If you hold shares for dividends and long-term growth, views differ:
| Method | What you pay zakat on | Who is associated with it |
|---|---|---|
| Zakatable assets per share | Your share of the company's cash, receivables and inventory, taken from its balance sheet | AAOIFI's Shariah Standard on zakat; many contemporary scholars |
| Market value | The full market value of the shares | Scholars who treat all shares like trade goods, as a precaution |
| Dividends only | Dividends received, added to your cash | A minority view, sometimes linked to treating shares like rented property |
If the company already pays zakat on its own assets, some scholars say shareholders need not pay again on the same assets. In Pakistan, check whether the company or fund states this.
Shariah screening of shares is a separate question. See Halal stocks and PSX basics.
Zakat on trading
Business trading. For a shop or trading business, the usual method is:
- Value stock at its current sale value.
- Add cash and recoverable receivables.
- Subtract debts the business owes that fall due now.
Brokerage and trading account balances. Cash in a trading account counts like cash in a bank. For open positions in shares, apply the share methods above.
Leveraged CFDs and forex. Leveraged CFD and forex positions are a contested area. Many scholars question whether such trading is permissible at all; see Is forex halal?. For zakat, a common practical approach is to count only your account equity, not the leveraged position size. Equity is your balance plus or minus the result of open trades.
Leveraged trading can lose money fast, so the equity on your zakat date may differ sharply from what you deposited. Note also that, per the SBP, remitting foreign exchange to overseas forex/margin/CFD platforms is not allowed through any payment channel (FERA s.5(1)). See Law and regulators.
Crypto. Scholars who accept crypto as wealth usually treat coins held for resale like trade goods, valued at market price. Others question its status; see Is crypto halal?.
Funds, sukuk and gold
- Mutual funds: Many methods use the zakatable share of the fund's assets. A simpler cautious approach uses the full redemption value.
- Sukuk: Sukuk represent ownership in assets, so treatment depends on what the underlying asset is. See Sukuk explained.
- Gold and silver: Counted by weight at current value. See Zakat on gold.
- Takaful and pension contributions: Views depend on whether you own and can withdraw the money. Ask a scholar about your specific plan.
Deducting debts
The Hanafi view, common in Pakistan, deducts debts you owe from your zakatable wealth. For long-term loans such as house financing, many contemporary scholars allow you to deduct only the instalments currently due, not the whole balance.
Other schools are stricter about deducting debts. Use the debts field in the calculator in line with the view you follow.
Where these views come from
Common references include:
- the AAOIFI Shariah Standard on zakat
- resolutions of the International Islamic Fiqh Academy
- recommendations of Pakistan's Council of Islamic Ideology
- fatwas from established darul ulooms in Pakistan
Read the original text from the issuing body, as summaries often drop conditions. For background, see Islamic finance principles and Islamic finance.
Frequent questions
Is zakat due on the full value of my shares?
It depends on your intention and the method you follow. Shares held for resale are usually counted at full market value. For long-term holdings, many scholars, including the AAOIFI approach, count only the company's zakatable assets per share.
Do I pay zakat on profit I have not yet withdrawn?
Under most methods, yes. What counts is the value you own on your zakat date, whether or not it has been withdrawn.
My bank already deducted zakat. Do I pay again?
Many scholars say the amount deducted counts against what you owe on that account. Other wealth still needs its own calculation.
Which nisab should I use, gold or silver?
Both are held by recognised scholars. Many Hanafi scholars in Pakistan prefer silver for mixed wealth. Ask a scholar you trust and use the calculator with your choice.
Is zakat due on interest I received?
Most scholars say interest should be given away, not treated as your wealth. Zakat is then paid on the principal.
Does a loss during the year cancel zakat?
Zakat is assessed on the net wealth you hold on your zakat date. If it is below the nisab at that point, many methods say no zakat is due for that year.