Most people find Zakat harder than it is, because they start by trying to value everything they own. You do not need to. Only some categories of wealth are subject to Zakat at all.
Step one: pick your Zakat date and keep it
Zakat is due once every lunar year. Choose a date, ideally one you will remember, and use the same date every year. Many people choose a date in Ramadan. The date matters because you are valuing your wealth on that day, every year.
Step two: add up what counts
Include:
- Cash, in hand, in the bank, and in mobile money.
- Gold and silver, whether jewellery or bullion. Scholars differ on jewellery in regular personal use; the Hanafi position includes it, others exempt it.
- Business stock, valued at what you would sell it for, plus business cash and money owed to you that you expect to receive.
- Savings held for a purpose, including money saved for hajj, a wedding or a house.
- Livestock and farm produce, which follow their own separate rules and thresholds.
Step three: leave out what does not count
You do not pay Zakat on the things you use rather than hold as wealth:
- The house you live in, and the furniture in it.
- The vehicle or boda you use, including one used to earn a living. The earnings are subject to Zakat; the tool is not.
- Tools and equipment of your trade.
- Clothing and personal effects.
Step four: subtract immediate debts
Deduct debts that are due now or within the coming year: rent arrears, school fees owed, a trade debt falling due, this year's instalments on a longer loan. Do not deduct the entire outstanding balance of a long-term loan, only the portion due within the year.
Step five: compare the total against nisab
Nisab is the minimum wealth at which Zakat becomes due. It is defined as the value of 87.48 grams of gold or 612.36 grams of silver. Because the two metals have very different prices, the two thresholds differ substantially, and which one you use changes whether you owe Zakat at all. Most contemporary scholars advise using the silver threshold, because it is lower and therefore means more people pay and more poor people receive.
Look up the current local price per gram on your Zakat date and multiply. Do not rely on a figure printed last year.
Step six: take 2.5 per cent
If your net total is at or above nisab, and it has been for the whole lunar year, Zakat is 2.5 per cent. Multiply by 0.025. On 4,000,000 shillings of qualifying wealth, that is 100,000 shillings.
What if my wealth dipped below nisab during the year?
The requirement is that wealth remained at or above nisab for the full lunar year. The widely followed position is that brief dips do not break the year as long as you were above nisab at the start and at the end. If your wealth fell below nisab and stayed there, the year restarts when you next cross the threshold.
What if I cannot pay it all at once?
Zakat is a debt owed to the eligible recipients, so it should be paid as soon as it falls due. If the amount is large relative to your cash, you may pay in instalments across the year, but do not let it lapse. Some scholars permit paying in advance of the due date, which can be easier to budget.
Keep a one-page record
Write down the date, the categories, the totals, the nisab figure you used and the amount paid. Next year the calculation takes ten minutes instead of an afternoon, and if anyone ever questions the payment you have an answer.
This guide covers the mainstream position. Where scholars differ, that is noted. For your own circumstances, particularly around business assets, agricultural produce or jewellery, ask a scholar you trust.