Zakat is one of the five pillars of Islam and the only one with mechanical rules strict enough to run through a calculator. Yet most Muslim users end up doing the math in a spreadsheet once a year because no mainstream finance app has built it in. This guide walks through every rule you need — Nisab, Hawl, eligible assets, madhab differences — and ends with a four-step calculation you can do today.

1. The core rule in one sentence

If your net zakatable wealth stays at or above Nisab for one Hawl, you owe 2.5% of that wealth as Zakat. Everything else in this guide is clarifying what each of those terms means in practice.

2. What is Nisab?

Nisab is the minimum wealth threshold that triggers Zakat. Two standards exist, both inherited from the Prophetic era: silver (595 grams) and gold (85 grams). You multiply the weight by the current market price of the metal in your currency. The result is your Nisab in money.

Today the two standards produce very different numbers because the gold-to-silver price ratio has changed dramatically over centuries. Silver Nisab is typically a fraction of gold Nisab.

Detailed walkthrough: what is Nisab and how to calculate it.

3. What is Hawl?

Hawl is the lunar-year rule — approximately 354 days. Your wealth must stay at or above Nisab continuously for one Hawl before Zakat becomes due. If you fall below Nisab at any point and then climb back above it, the Hawl clock restarts.

In practice, most people set one fixed date each year (often Ramadan) and calculate Zakat on that date every year as long as their wealth has been above Nisab since the previous year's Zakat day. Full post: the lunar-year rule explained.

4. Which assets are zakatable?

Zakat applies to wealth that grows or could be used for trade. It does not apply to personal-use items that do not generate returns.

Zakatable

Cash (physical, bank, mobile wallets)
Savings in any form
Gold and silver (bullion and, in most madhabs, jewelry — see below)
Stocks and mutual funds
Cryptocurrency
Business inventory and trade goods
Receivables you expect to collect
Rental property income (not the property itself)

Not zakatable

Your primary residence
Personal vehicles
Household goods, clothes, appliances
Tools of your trade that you use personally

5. How the four madhabs differ

All four Sunni madhabs — Hanafi, Maliki, Shafi'i, and Hanbali — agree on the 2.5% rate and the Nisab-plus-Hawl framework. They differ in specifics:

Gold jewelry. Hanafi: all gold and silver jewelry is zakatable. Maliki, Shafi'i, Hanbali: reasonable personal-use jewelry is generally exempt; excessive jewelry is zakatable.
Debts. All schools allow deduction of short-term debts due within the year. Long-term mortgages are usually deducted only for the current annual installment.
Business inventory. Schools agree inventory held for trade is zakatable at market value on Zakat day.
Shares of companies. Trading portfolios are fully zakatable. Long-term investments — there is scholarly variation on whether to zakat the full value or only the zakatable portion (cash plus trade goods) of the underlying company.

Full breakdown: how the four madhabs differ on Zakat.

6. Zakat on stocks, crypto, and business inventory

These three asset classes trip up most spreadsheets.

Stocks. If you trade, treat full market value as zakatable. If you invest long-term, many scholars accept zakat on the "zakatable portion" — the share of the underlying company that consists of cash, receivables, and inventory rather than fixed assets. CashMate supports both approaches.

Crypto. The mainstream contemporary view treats Bitcoin, Ethereum, and similar as currency-like or trade-goods-like — zakatable at 2.5% of market value on your Zakat day. Detailed post: how to calculate Zakat on crypto.

Business inventory. Value trade goods at their market price on Zakat day, not at cost. Raw materials, work-in-progress, and finished goods are all zakatable. Deep dive: Zakat on business inventory.

7. The four-step calculation

The four-step method keeps the math simple:

List every zakatable asset at current market value on your Zakat day.
Subtract short-term debts due within the year.
Compare the net to Nisab (silver standard recommended).
If above Nisab and one Hawl is complete, multiply by 0.025.

That's it. The arithmetic is simple. The work is in being honest about the valuations and consistent about the Hawl date.

8. Building it into a habit

Pick a fixed date each lunar year — Ramadan works well because it doubles as a spiritual checkpoint. On that date:

Snapshot every zakatable balance.
Record the metal prices you used.
Calculate and pay Zakat within the following weeks.

Keeping annual snapshots means you can compare year over year: is your Nisab calculation drifting because metal prices changed? Is your zakatable portfolio growing? That visibility matters for long-term planning.

CashMate handles this snapshot workflow natively — import balances directly from your tracked accounts, switch madhabs, and see multi-year trends.

Deep dives in this series

What's next

You do not need an app to calculate Zakat — a spreadsheet will work. But once you want to switch madhabs, import balances from your accounts, compare year over year, and store snapshots for future reference, the spreadsheet breaks down. Try the free Zakat calculator — no signup required — or sign up for the full in-app version with multi-year tracking.