The Comprehensive Guide to Calculating and Paying Zakat: Method, Nisab, and Giving to Relatives (2026)
Introduction
Every year, millions of Muslims across the globe fulfil one of the most vital pillars of Islam: Zakat. Whether you are a student, a salaried professional, or a business owner, calculating and paying your Zakat is not just an act of worship—it is a sacred financial obligation that purifies your wealth and uplifts entire communities.
Digital tools, such as the [Mercy Relief Zakat Calculator UK], have made this process clearer, safer, and easier than ever before.
The Wisdom Behind Zakat:
Purification of Wealth: Cleanses your earnings from any doubtful or impure aspects.
A Cure for Poverty and Unemployment: Provides direct financial relief to the needy.
Establishment of Social Solidarity: Solidifies the principle of mutual responsibility and community support (Takaful).
Support for Vulnerable Groups: Facilitates ethical wealth redistribution.
Zakat was prescribed to purify the soul and wealth, strengthen faith, establish solidarity and security in society, bring blessings, avert calamities, and attain the pleasure and reward of Allah.
Who is Required to Pay Zakat?
Zakat is not mandatory for every Muslim. It only applies if the following conditions are met:
You must be a Muslim of sound mind.
You must have possessed wealth equal to or exceeding theNisab threshold for a full lunar year (Hawl).
Your wealth must be 'productive' or 'growing' (such as cash, gold, savings, shares, and tradable business assets).
If these conditions are fulfilled, you must calculate and pay Zakat based on your total eligible assets.
What Assets is Zakat Due On?
Zakat is applicable to:
- Cash savings and bank balances.
- Gold and silver assets.
- Business inventory or trade goods.
- Investment portfolios or shares.
- Rental income or expected recoverable debts.
- Non-Zakat-able items typically do not include: your personal home, car, and essential daily living needs.
Steps for Zakat Calculation:
While using the Mercy ReliefZakat Calculator can significantly simplify the process, it is important to understand the fundamental calculation method.
1- Determine theNisab Value
The Nisab is the minimum threshold of wealth that makes Zakat obligatory. It is based on the current market price of either 612.36 grams of silver or 87.48 grams of gold.
|
Metal |
Value per Gram (2026 Estimates)* |
Nisab Value |
|
Gold |
£99.92 |
£8,740.94 |
|
Silver |
£1.23 |
£752.59 |
2- How to Calculate Zakat on Total Assets:
To make the task easier, we have provided this simple example:
Aggregate all your eligible Zakat-able assets:
Cash: £5,000
Gold: £2,000
Shares: £1,500
Trade Goods (Inventory): £3,000
Total Assets = £11,500
3- Deduct Liabilities and Debts
Subtract any immediate debts (such as unpaid bills or short-term loans). For example:
Debts/Liabilities: £2,000
Net Zakat-able Wealth =£11,500 − £2,000 = £9,500
4- Apply the Zakat Rate of 2.5%
{Zakat Due} =2.5% × £9,500 =£237.50
Zakat on Bank Savings
If you save a monthly amount, there are two common methods for calculating Zakat:
Method One: Gross Annual Calculation
You calculate the total amount of savings you possess when the Hawl (lunar year) is completed, and then pay Zakat on that total. This is the easiest and most commonly used method.
Method Two: Independent Hawl for Each Deposit
Each monthly deposit or payment has its own separate Hawl calculated. This is a more precise method, but it requires greater monitoring and effort.
However, the majority of scholars simplify the process by allowing the use of the first method due to its ease of application.
Zakat on Salaries (Wages)
Zakat is not immediately due on a salary upon receipt. Rather, it becomes due only on the portion that is saved if that portion meets the Nisab and a full Hawl has passed over it.
Example:
If you saved £5,000 during the year, and you had previous savings that had already met the Nisab, Zakat is due on the total accumulated amount at the completion of the Hawl.
Zakat on Gold
This is one of the most frequently asked subjects, especially since many women own gold for personal use (jewellery/ornaments).
Is Zakat due on Gold Used for Adornment?
Majority Opinion: Yes, Zakat is due on it if it reaches the Nisab.
Other Opinion: There is no Zakat on permissible jewellery intended for personal use.
The Safest and Most Recommended Approach: To pay Zakat on the gold to eliminate any difference of opinion.
Gold Nisab:
The Nisab for gold is 85 grams of pure gold.
Is Craftsmanship/Labour Cost Included in the Calculation?
No. Zakat is calculated on the raw value of the gold only, without adding the manufacturing or craftsmanship cost.
Zakat on Trade (Business Assets): How is it Calculated?
Zakat is due on goods and stock intended specifically for sale.
Method of Valuation
Assess the current market value of the inventory (typically the wholesale price).
Add any expected profits related to the goods when sold. (Note: The common scholarly view is to value stock at its selling price, but often the wholesale/cost price is used for caution, or just the current market value. I will simplify step 2 by focusing on the primary assets.)
Include all cash reserves linked to the business.
Deduct all trade-related debts that must be paid off within the current Hawl (lunar year).
Pay 2.5% of the net calculated figure.
Practical Example (Using the figures provided, assuming the currency is the Pound sterling in the original context, but maintaining the calculation structure):
|
Item |
Value (EGP/Currency Equivalent) |
|
Value of Trade Goods (Inventory) |
50,000 |
|
Cash Reserves |
10,000 |
|
Business Debts (Liabilities) |
5,000 (Deduct) |
Zakat-able Amount:
50,000 + 10,000 - 5,000 = 55,000
Zakat Due:
2.5% × 55,000 = £1,375
Utilising the Mercy Relief Zakat Calculator
-
Calculating Zakat manually can become complex when dealing with multiple types of wealth (cash, businesses, shares, cryptocurrencies, etc.). This is where the reliable Mercy Relief Zakat Calculator steps in to simplify your charitable giving.
Benefits:
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Accurate Formula: Ensures calculations are precise and compliant with Islamic law.
Instant Conversion: Utilises up-to-date gold/silver Nisab prices.
Clear Breakdown: Provides a detailed breakdown for each asset type.
Option to pay Zakat online immediately in the UK, EU countries, America, Canada, and Arab nations.
How to Pay Zakat Online
Onceyour Zakat has been calculated, the critical next step is payment. Mercy Relief UK has made this process fast, secure, and transparent
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Who is Eligible to Receive Zakat? (Recipients of Zakat)
Zakat may only be distributed among the eight categories mentioned in the Holy Qur’an (Surah At-Tawbah 9:60):
“ Indeed, Ṣadaqāt (Zakat) are for the poor, and the needy, and those employed to collect [Zakat], and those whose hearts are to be reconciled [to Islam], and for [freeing] slaves, and for those in debt, and for the cause of Allah, and for the traveller. ”
Translating this into our contemporary reality, Zakat can go towards:
Orphans and widows.
Refugees and displaced families.
Individuals burdened by debt (the Ghaarimeen).
Students facing financial hardship.
Communities in crisis regions, such as Gaza, Yemen, and Syria.
The Spiritual Value Behind Paying Zakat
Far beyond the numbers and equations, Zakat carries a profound spiritual significance. It not only purifies wealth but also purifies the heart of the giver.
The Messenger of Allah {ﷺ} said:
"Wealth is not diminished by charity (Ṣadaqah)." (Sahih Muslim)
Paying Zakat connects you to the global Ummah and extends a hand of mercy to those forgotten on the fringes of society. When you consciously calculate and pay your Zakat, you build a sustainable chain of compassion that reflects the highest Islamic ethics.