Estimate Zakat due at the standard 2.5% rate on qualifying wealth above the Nisab threshold.
Zakat = 2.5% × qualifying wealth, payable if your total qualifying wealth is at or above the Nisab threshold (commonly based on the value of ~87.48g gold or ~612.36g silver — check current values, as this varies with market prices).
Zakat is due only once wealth clears two conditions: it must reach the minimum threshold called nisab, and it must remain at or above that threshold for one full lunar year (hawl) before the 2.5% rate applies to the qualifying wealth held at the end of that year. Nisab itself is defined two ways — 87.48 grams of gold, or 612.36 grams of silver — and because gold and silver prices move independently, these two thresholds translate into very different cash figures at any given time; the gold standard is typically the higher of the two in modern prices.
Most contemporary scholars, particularly in the Hanafi school, recommend using the lower silver-based nisab rather than the gold-based one, on the reasoning that a lower threshold brings more people into the obligation and channels more zakat to those who qualify to receive it — closer to the standard's original redistributive purpose. The practical effect: someone whose savings, gold, cash and business inventory would fall short of the gold nisab may still clear the silver nisab and owe zakat. Whichever standard is used, the calculation only ever applies to wealth actually held for the full lunar year — money spent, given away, or that dipped below nisab partway through the year does not carry the same obligation for that period.
Nisab is the minimum amount of wealth a Muslim must possess before zakat becomes due. It's defined as the cash value of either 87.48 grams of gold or 612.36 grams of silver — whichever standard is being used — converted to local currency at current market prices.
Most contemporary scholars, including the Hanafi school, recommend the silver-based nisab because it is typically the lower of the two, meaning more people qualify to pay and more zakat reaches those in need. Some individuals and institutions still use the gold standard — check with your local scholar or organization if unsure which convention applies to you.
Hawl is the requirement that wealth must remain at or above the nisab threshold for one full lunar (Hijri) year before zakat is due on it. Wealth that dips below nisab at any point during the year, or is acquired partway through and hasn't completed a full lunar year, does not trigger the same obligation for that period.
Generally: cash and bank savings, gold and silver (jewelry treatment varies by school of thought), business inventory and trade goods, and investments held for growth. Personal-use items like a primary residence, a personal vehicle, and everyday household goods are typically excluded — the underlying principle is that zakat applies to wealth that could grow or be held as savings, not to items used for daily living.