1. Bank statements
2. Jeweler invoices
3. Stocks & dividends
4. Retirement accounts
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From prophetic teachings, we know the minimum amount required to be obligated to pay Zakat. In modern times it’s equal to the cash value of 595 grams of silver.
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If you don’t know the weight of the gold or silver go to your local jeweler and ask them to weigh your gold and silver from the jewelry, or you can check old invoices.
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You may be familiar with the following types of investments:
1. Stocks
2. Retirement accounts
3. Pensions
4. Cryptocurrencies
5. Investment properties
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If you bought stocks planning to sell them within a year, they are treated like merchandise —
so you pay Zakat on the full market value.
If you bought stocks planning to keep them for at least a year, you’re
treated more like a business partner. In that case, you don’t pay Zakat
on the whole share price. You only pay Zakat on the part of the company
that counts as Zakat-able (like cash, gold, inventory, etc).
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Only the zakatable assets of the shares are liable for Zakat. Scholars, including Sh. Joe Bradford,
have allowed approximating this number to 30% of the market value of your stocks.
Example:
If your Costco (COST) shares are worth $5,000: 30% of $5,000 = $1,500
Zakat will be calculated on $1,500 (not the full $5,000)
If you bought shares to hold long term, you don’t pay Zakat on the full market value. Instead,
you pay Zakat only on the part of the company that counts as Zakat-able (like cash and similar assets).
Since this is hard to calculate for every company, many Islamic scholars allow using an estimate of 30%
of the share value. So we simply take 30% of your total stock value, and that portion is what you pay Zakat on.
Just enter the current total value of your shares. We will automatically apply the 30% rate and calculate your Zakat for you.
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Cryptocurrencies are treated like cash, so Zakat is due on the current value of the entire amount of crypto you have.
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Depending on your country of residence, retirement accounts may have different names. Put simply,
any funds that you have stashed away in investments also count towards your zakat, provided you
have access to it. Access means you could withdraw those funds if you wanted to (even if this
would trigger a penalty).
If you do have access to your retirement funds, you must pay Zakat on them similar to how Zakat
is paid on long-term stocks. This means only paying Zakat on the amount of Zakat-eligible assets
the company owns. Contemporary scholars have allowed approximating this to 30% of the entire value.
So if your entire retirement account is worth $100,000, Zakat would only be paid on $30,000.
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Business merchandise refers to any item that was purchased with the clear intention of resale. This applies whether it is part of a formal business or a smaller side venture. For example, if someone buys phones, electronics, clothing, or other goods specifically to sell them for profit, those items would be considered business inventory. Likewise, the inventory of a small or large business would fall under this category.
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Immediately due means your next payment on your expenses. For example if you pay your car insurance monthly, you will deduct one month of car insurance payment.
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You may have the following types of expenses:
Housing
Upcoming rent or mortgage payments
Insurance
Upcoming home, auto and medical insurance payments
Utilities
Upcoming energy, water and internet bills
Transportation
Upcoming car payments
Your next upcoming expense is what is deducted
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The amount of nisab prescribed during the time of the Prophet (saw) was 85 grams of gold (known as
dinar at the time) or 595 grams of silver
(known as dirham at the time). The dinar and dirham were interchangeably used in the markets in the
prophetic era.
The exchange rate was 1:10 at the time and therefore the Zakat payer ended up paying the same amount
whether he/she chose silver or gold nisab.
However, there is a stark difference between silver and gold nisab today and therefore majority of
scholars suggest the use of silver nisab.
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Would you like to save your Zakat calculation first so that you can keep track of your annual Zakat
giving?
If you choose to save later, you may need to restart your calculation at that time.
This name is already in use. Please resave with a different name.
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Start date
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End (due) date
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We’ve automatically set your Zakat end date to 1 lunar year from your start date.