Zakat is one of the five main pillars of Islam. It needs to be offered once during the Islamic year. This means that you have to mark one day each year to calculate your Zakat of all the assets you have collected over the year. It is not unusual for many Muslims to note the beginning of Ramadan as the time of giving Zakat.
However, to calculate your Zakat, you need first to find out if you are a Sahib-e-Nisab. In other words, Zakat is the only obligation on those Muslims who have more than the required amount of savings and goods. Once you have decided whether you are eligible to pay Zakat, you can calculate it accordingly.
Are You Eligible for Paying Zakat?
Nisab is based on the trading rate of gold or silver in your local currency. You are a Sahib-e-Nisab, and you are eligible to pay Zakat if the sum of your goods equals to, or is more than 7.5 tola / 3 ounces / 87.48 grams of gold, or 52.5 / 21 / 612.36 grams of silver for an entire year. Since gold and silver can be used as a currency in today’s world, it is essential to convert Nisab into your local currency based on the current value of gold or silver on the calculation day.
Please note that we will use Pakistani Rupees (PKR) as the default currency in our examples to illustrate how to calculate Zakat in Pakistan. Still, all prices and amounts will vary depending on when you calculate your Zakat and in which country.
- Gold and silver Nisab calculation formula in Pakistan
Assuming you are counting your Zakat on the day when the gold standard in Pakistan is PKR 96,400 per tola. So:
PKR 96,400 * 7.5 tola = PKR 723,000
On the other hand, if you use silver to calculate Nisab and assume that the average silver price in Pakistan for that day is PKR 1,456 per tonne. So:
PKR 1,456 * 52.5 tola = PKR 76,440
So, this means that if you calculate your Zakat with Nisab gold and have more than PKR 723,000 as your savings and assets for the entire year, you are qualified to pay Zakat on them. Alternatively, you will have to pay Zakat on goods and savings for a full year of the month if it reaches PKR 76,440 based on Nisab silver.
The important thing to note here is that your total amount should be above Nisab for a full lunar year. If your assets fall below PKR 76,440 (for example) during the month, your new year will start again when you are over Nisab again, and the start date on the Islamic calendar should be the day of reckoning Zakat a year later. In contrast, if you are a Sahib-e-Nisab all year round, it is up to you to decide one day a year to calculate your wealth, but as mentioned above, many people choose the month of Ramadan for this act of charity.
Which Nisab Should You Choose? Gold or Silver?
Now the question is – which Nisab should you choose? Although silver Nisab is considered Afzal or very beneficial, both for the recipient and donor, as additional Zakat is given due to the lower limit, there is a way to decide which Nisab should be used.
Generally, if you only have assets and savings in gold, that is the Nisab you should use. However, if you have savings and silver or mixed goods, including cash, gold, silver, and other commodities, it is best to use Nisab silver.
Please note that different religious denominations may differ in their views on which Nisab to follow, and if in doubt, it is best to seek advice from an Aalim-e-Deen of your sect.
Calculating Zakat in 2022
Calculating Your Zakat is easy once you have tabulated your assets. So, count Nisab and find out if you are eligible to pay Zakat 2022. Although Zakat calculators are available online, many of them will not show you how to calculate Zakat for a specific year. On the contrary, we will take you through a step-by-step process to help you understand how Zakat is calculated for gold and all your other assets for one year.
First of all, remember that Zakat applies to savings and excess goods for personal use. Therefore, your house, clothes, car, electrical appliances, and other things you use every day are not included in the Zakat calculation.
Assets to Include
- Money, whether at home or in a bank
- Owned foreign currency (an amount equal to the local currency conversion rate)
- Savings for a specific purpose, such as Hajj, wedding, car purchase, etc.
- The value of all the gold and silver you own in local currency
- The market value of any shares you may own if you wish to sell them
- Profits from stocks if you do not sell them soon
- The money you are owed and which will also be repaid soon
- Business owners should also include a balance sheet amount for ownership stocks
- Landlords should put on the table any leased savings
- If a property is purchased as an investment to be sold, it means that you should include its market value
- Expected profit from the sale of investment property soon
Updated Zakat Calculator by Transparent Hands
On the other hand, you can also use an online zakat calculator for this purpose. Transparent Hands zakat calculator is an excellent choice that you can consider in this regard.
Why do we ask you to opt for the Transparent Hands zakat calculator? Well, there are multiple reasons behind this recommendation of ours.
- Features a simple interface,
- It is easy to use,
On the main page of the calculator, you will see several empty columns against the title of the asset. Just enter the data in the right column, and you are done. What is more, the modernized zakat calculator tool makes giving Zakat simple as well, since you have an option to donate to Pakistan’s leading trust organization, Transparent Hands, as well!