Finance
How to Calculate Zakat Correctly in 2025
28 February 20257 min read
ZakatIslamWealth
What is Zakat?
Zakat is one of the five pillars of Islam — an obligatory 2.5% charity on wealth held above a minimum threshold (Nisab) for one lunar year (Hawl).
What counts as zakatable wealth?
- Cash on hand and in bank accounts
- Gold and silver (jewellery, bullion)
- Business inventory and receivables
- Shares and investments held for trade
- Crypto held for investment
What does NOT count
- Your primary home
- Personal vehicle
- Clothing and household items
The formula
Net wealth = Cash + Gold/Silver + Investments − Short-term debts
If Net wealth ≥ Nisab → Zakat = Net wealth × 2.5%
Worked example
| Item | Value (PKR) |
|---|---|
| Cash in bank | 500,000 |
| Gold (50g × PKR 25,000) | 1,250,000 |
| Business stock | 200,000 |
| Outstanding bills | −50,000 |
| Net wealth | 1,900,000 |
| Zakat (2.5%) | 47,500 |
Try our Zakat Calculator for an automatic calculation.
