The amount of wealth which makes one liable for zakāt is called nisāb.  nisāb is the threshold line, which separates those who are obligated to give zakāt from those who are not. In other words, nisāb is the minimum amount of wealth whose owner is deemed to be wealthy in the conception of SharÄ«’ah and zakāt is obligatory on him.

 

Zakāt is calculated periodically. Each period is one Islamic year long and is called a hawl. A person’s hawl date (on which he calculates his zakāt every year) is set by the date on which (1) his zakātable assets reached the amount of nisāb for the first time and (2)one full Islamic year after that date, the assets are at least nisāb value as long as (3) some of the wealth remained throughout the course of this year (i.e. the wealth did not diminish to zero at any point throughout the course of this year). Thereafter, the zakāt hawl date remains constant on that date every year. 

 

For example: Zaid owns nisāb amount, $400, on Rajab 1, 1434. He did not own any wealth prior to this. He continues to own some wealth (it did not diminish to zero at any point) throughout the following year. On Rajab 1, 1435, he calculates his wealth again and sees that he owns $450, which is at least nisāb amount. This date (Rajab 1) becomes the set date on which Zaid calculates his zakāt hawl every year.

Note: If ones wealth diminishes to zero at any point, the hawl calculation restarts from the point his wealth reaches the nisāb amount again.

If ones wealth decreases during the course of the hawl, and it increases again to the value of nisāb by the date of the hawl, the zakāt must be calculated on the full amount that is possessed at the date of the hawl. Fluctuations in the course of the year are to be disregarded. 

For example: A person’s yearly hawl date is Sha’ban 1 and his cash balances are:

Date                            Cash Balance

Sha’ban 1, 1434        $2,000

Ramadan 1, 1434      $4,500

Muharram 1, 1435  $200

Sha’ban 1, 1435         $2,500

Zakāt will be payable on the $2,500 at hand on Sha’ban 1, 1435.

Note: Zakāt is due on whatever wealth is in ones possession on the date of hawl. It is not necessary that any particular asset remains in ones possession for a full year.

The nisāb of gold and silver fixed by Ras$3;lullāh (saw) is as follows:

87.48 grams (2.8125 troy ounces) of gold or 612.36 grams (19.6875 troy ounces) of silver or its equivalent amount of cash or trading assets, etc.

As prices changes frequently, the current market price of gold and silver must be used to calculate the dollar amount of nisāb on the hawl date.

Note: If one has only gold assets, the nisāb for gold must be used to see if he is liable for zakāt.  Similarly, if one has only silver assets, he is to use the nisāb for silver.  If one has different types of zakātable assets, such as cash, merchandise, gold and silver mixed, he must use the lesser of two nisāb values. This is most beneficial for the poor.  

For example: A person has 20 grams of gold, 100 grams of silver and $350 in cash.  The dollar value of the gold Nisāb is $3,700 and silver Nisāb is $370.  He must combine the value of all his zakātable assets and see if it is at least the value of the lesser of the two nisābs (silver = $370), then calculate zakāt on these assets. 

The rate of zakāt which was fixed by Ras$3;lullāh (saw) is 2.5% (1/40) i.e. 2.5 cents per dollar.

Note: Zakāt is calculated by subtracting the liabilities due immediately or in the near future. For example: A person has $900, but owes $400 immediately. Zakāt is due on the remaining $500 (given that it is at least equal to nisāb amount).

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Prepared by Darul Ifta, Shariah Board, New York