Nisab of Zakat in Islam |Timing and Calculations

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The nisab is the minimum amount of money or assets a Muslim needs to have before they have to pay Zakat. The nisab of Zakat in Islam is set at 2.5% of everything they own.

The Prophet Muhammad (PBUH) established the Nisab of Zakat at a certain weight of gold or silver. Gold zakat Nisab is about 3 ounces (87.48 grams), and silver zakat Nisab is about 21 ounces (612.36 grams).

Here's an important thing to remember: If someone only has gold, they must use the amount of Zakat Nisab for gold. But if they have a mix of assets like some gold, some silver, and other things, they should use the lower value, which is the silver Nisab amount.

Zakat Nisab as of April 1st, 2024/Ramadan 22, 1445 AH

Here are the current Zakat Nisab thresholds based on the values of silver and gold:

Using the value of silver (612.36 grams) – approximately 100,120.8 Pakistani Rupees
Using the value of gold (87.48 grams) – approximately 1,282,282.5 Pakistani Rupees

Note: In the Hanafi school, silver's worth sets nisab of Zakat in Islam; other schools of thought use gold for this purpose.

Zakat Nisab 2024 in Pakistan: According to the Zakat and Ushr Ordinance, 1980, Zakat will be deducted at source. This occurs if the balance in designated accounts equals or exceeds Rs 135,179 on the first day of Ramadan-ul-Mubarak, 1445 A.H.

When Zakat Nisab Due?

Zakat becomes obligatory on assets such as gold, cash, and property when they exceed the Nisab threshold within the Hijri year, a lunar calendar cycle. This year-long timeframe for Zakat calculation is termed a hawl.

Note: The hawl period begins when your wealth reaches the minimum threshold and continues for 12 full lunar months.

Changes in Zakat Nisab

If wealth falls below the Nisab threshold within the lunar year, the Zakat year restarts. This is according to three of the four main schools of Islamic Law (Maliki, Shafi‘i, and Hanbali).

In the Hanafi school of thought, if your wealth drops below the Nisab limit after reaching it once, your Zakat schedule doesn't change. This applies if one had the Nisab amount at the beginning of the Zakat year (hawl) and also has the nisab for that wealth on its due date.

The above graph depicts the Hanafi view on Nisab (dates are arbitrary). Periodic dips below Nisab don't impact Zakat payment at its due date (“W” In this graph). “A” marks when other legal schools restart the Zakat year because wealth dropped below, then rose back to, the Nisab threshold.

Nisab and Zakat Calculation for Personal and Business Wealth

The Nisab for different types of Zakatable wealth is determined in monetary terms. It encompasses both personal and business wealth.

Criteria for Personal Wealth (P WEALTH)	Criteria for Business Wealth (B WEALTH)
Total currency (on hand and in accounts)	Business cash (on hand and in accounts)
Separate total weights of precious metals (gold, silver, platinum, etc.)	Net value of inventory & trade goods
Total value special accounts (retirement, pension, education, etc)	Total due receivables (by zakat due date)
Total goods (likely to be paid back) loans out	Year’s net income (from exploitable & business assets (rentals, etc.)
Total refunds, salaries, insurance cash values, prof. payments receivable by zakat due date	Total value real estate (for investment or sale)
SUBTOTAL = or > Nisab (current price of gold per gram x 87.48 gm)	SUBTOTAL = or > Nisab (current price of gold per gram x 87.48 gm)
SUBTOTAL x .025 = due zakat	SUBTOTAL x .025 = due zakat

When individual wealth (P WEALTH) and business wealth (B WEALTH) each reach the nisab threshold separately, Zakat is paid. It's calculated at a rate of 2.5% on their combined total.

If the subtotals for P WEALTH and B WEALTH are individually below the nisab threshold but together meet or exceed it, the amounts are added. Zakat is then paid on the total at 2.5%.

If you have outstanding debts to repay or have already paid Zakat in advance. Then, these amounts will be subtracted from your total Zakat due, and you have to pay the remaining balance.

Zakat Due = Total (Personal Wealth + Business Wealth) x 2.5 – (necessary outstanding debts) – (advanced Zakat payment)

Importance of Zakat Nisab in Islam

Zakat shows devotion to Allah (SWT) and comes with rules. The main one is figuring out if you owe it by meeting the Nisab of zakat. Islam's principles of ease and peace ensure that burdens do not exceed one's capacity, as exemplified by Zakat requirements.

For those not obligated to pay Zakat, offering Sadaqah in various forms remains an option, all of which are rewarded by Allah (SWT). This extends beyond monetary charity to encompass gestures such as smiling at others, aiding those in need, and offering prayers for others.

Prophet Muhammad (SAW) said:
“Every good deed is charity. Verily, it is a good deed to meet your brother with a cheerful face, and to pour what is left from your bucket into the vessel of your brother.”
[Tirmidhi]

In conclusion, Understanding the nisab of zakat in Islam is crucial for Muslims to fulfill their Zakat obligations effectively. It specifies the minimum threshold of wealth at which Zakat becomes due, ensuring equitable distribution of wealth to those in need. By calculating Zakat on personal and business wealth in accordance with the Nisab, individuals uphold the principles of charity and social responsibility.

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Frequently Asked Questions

Should I use silver or gold when using the Nisab for calculating Zakat?

The nisab calculated using the silver standard is lower due to silver's decreased value since the time of the Prophet (SAW). Scholars debate whether to use the silver nisab to increase charity distribution or the gold nisab for historical accuracy.

However, individuals should use the nisab that corresponds to their asset composition: gold for gold assets and silver for silver assets.

How do you calculate zakat Nisab on cash?

To calculate nisab on money, determine the value of your cash assets, including savings, investments, and any other liquid funds. Once you have the total value, compare it to the current nisab threshold, which is based on either the value of gold or silver.

If your cash assets exceed the nisab threshold, you are obligated to pay Zakat on them. Additionally, you can use our Zakat Calculator to assist you in calculating your Zakat on cash.

What does Nisab mean?

The word 'nisab' means 'origin' because it marks the starting point at which a person's wealth becomes eligible for Zakat, benefiting the poor and those in need. Nisab is the minimum amount of wealth set by the Prophet Muhammad (SAW) for Muslims to give Zakat. This minimum varies based on the type of assets.

WRITTEN BY

Ali Raza (Zakat and Sadaqah Regulations)

Ali Raza holds a Master of Arts in Islamic Studies and is an expert in Islamic theology and jurisprudence. Specializing in Zakat, Sadaqah, and other Islamic donations, Ali's writings provide valuable insights into the religious and ethical aspects of charity. His work for Pakistan Sweet Homes aims to educate and inspire readers to support orphan care and charitable initiatives, making him a key contributor to the organization's mission.