Not everything you own is subject to Zakat. Assets for personal use (your home, clothing, personal vehicle, furniture, and work tools) are exempt. Zakat applies only to wealth that is productive, held for growth, or surplus to basic needs.
01Cash and Savings
All cash is zakatable: bank accounts (savings, current, fixed deposits), cash in hand, ISAs, bonds, national savings, and any form of liquid investment that can be readily converted to cash. This includes all currencies.
02Gold and Silver
Gold and silver in any form (bars, coins, ingots, jewellery) are zakatable. The key school difference is on worn jewellery:
Hanafi All gold and silver is zakatable, whether worn or stored, for personal use or investment. No exemption for jewellery.
Maliki Shafi'i Hanbali Jewellery worn for regular personal adornment is exempt. However, jewellery kept as investment, stored without use, or held for hoarding is always zakatable in all schools.
Valuation
Use the resale value of old gold (what a gold shop would pay you today), not the retail price you originally paid. For mixed metals, the Hanafi school says if 50%+ of the metal is gold/silver, the entire piece is treated as gold/silver. Gold-plated items (gold content well below 50%) are not zakatable.
Diamonds and Precious Stones
There is scholarly consensus that diamonds, rubies, pearls, and other precious stones are NOT zakatable. However, if they are held for trading purposes and their value reaches the Nisab, Zakat is due on the trade value.
03Business Goods
All merchandise and goods purchased for resale are zakatable at current market value (selling price, not purchase price). This includes finished goods, work in progress, and raw materials. The key principle is intention at purchase: if bought to resell, it is trade stock and zakatable.
Service-based businesses without physical inventory owe Zakat on remaining cash, receivables, and any other zakatable assets if they reach the Nisab.
04Stocks and Shares
Purchased for Resale (Trading)
The entire market value is zakatable, just like trade goods. Calculate at the market price on your Zakat date.
Purchased as Investment (Dividends)
The share value itself is not zakatable. Instead, Zakat is due only on the zakatable portion of the company's assets (cash, inventory, receivables). Make a realistic estimate of what percentage of the company's assets are zakatable, and apply that to your shareholding. Saved dividends are fully zakatable as cash.
05Real Estate
| Type | Zakatable? |
|---|---|
| Personal residence | No. Exempt as personal use. |
| Rental property | No Zakat on the property value. Zakat on saved rental income if it reaches Nisab and completes Hawl. |
| Property for resale (trading) | Yes. Full market value is zakatable annually, like trade goods. |
| No clear intention at purchase | No Zakat on property value. Only rental income (if any) is zakatable. |
Change of intention: If you bought a property to rent but later decide to sell, the property does not become zakatable trade stock retroactively. It only becomes zakatable once sale proceeds are held as cash on a future Zakat date.
06Pensions
After Retirement
Pension income received after retirement is fully zakatable as cash savings.
Before Retirement: Defined Benefit (Final Salary)
Not zakatable. You have no control over how the money is invested, and cannot access it until retirement.
Before Retirement: Defined Contribution / Personal Pension
Zakatable. You choose how the money is invested, which constitutes a degree of ownership and control. Pay Zakat on the accessible fund value.
07Trusts
Child Trust Funds: No Zakat until the child reaches 18 (or puberty in the Hanafi school). Bare (Nominee) Trusts: Zakatable if the beneficiary has reached the age of obligation; trustees pay on their behalf. Discretionary and other trusts: Not zakatable while assets remain in trust, because neither trustees nor beneficiaries have full possession. Zakat applies only once assets are distributed.
08Agricultural Produce (Ushr)
Zakat on agricultural produce is called Ushr and has different rules from monetary Zakat. It is due at harvest time, not after a year. The rate is 10% for rain-fed or naturally irrigated crops, and 5% for artificially irrigated crops (pumps, tube wells). Farming expenses are generally not deducted before calculating Ushr.
If land produces multiple harvests per year, Ushr is payable on each harvest. After paying Ushr, stored grain is exempt from further Ushr, but if sold, the proceeds enter the normal Zakat cycle.
09Livestock
Camels are zakatable from 5 head (one sheep due), cattle from 30 head (one yearling calf), and sheep/goats from 40 head (one sheep). Larger herds follow graded schedules in classical manuals. Livestock must graze freely (Sa'imah) for most of the year to be zakatable in all schools except Maliki, which levies Zakat on both grazing and non-grazing livestock.
10Mining and Treasure (Rikaz)
Treasure found underground is zakatable immediately at 20%, with no Hawl and no Nisab requirement. Minerals extracted from the earth are also zakatable upon extraction.
11What Is NOT Zakatable
Your primary residence · Your personal vehicle · Clothing and personal items · Furniture and household goods · Work tools and equipment · Diamonds and precious stones (unless for trade) · Gold-plated items (gold content below 50%) · Haraam income (must be disposed entirely as charity, not Zakat)
Next: How to Calculate Zakat — Step-by-step method with worked examples.