Zakat on Cash & Savings

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When is zakat owed on cash?

Zakat is due on cash and bank balances when two conditions are met: the total exceeds nisab (pegged to the value of 85 grams of gold in USD, shown live in the calculator above), and the wealth has been held for one lunar (Hijri) year.

The one-year period is personal — it starts on the date your wealth first crossed the nisab threshold, and resets each year on that anniversary. Good Measure Giving's in-app zakat planner can help track this date; it's worth recording to avoid paying zakat twice on the same year or missing a year entirely.

What counts as cash for zakat?

Zakat-eligible cash includes physical currency, checking and savings account balances, money-market balances, and short-term deposits you can access within the lunar year. It also includes prepaid balances (gift cards, Venmo, PayPal) that represent actual spendable money.

Foreign currency held for personal or business use counts at its current USD exchange rate. Cash specifically earmarked for a known near-term expense (rent due this month, a scheduled medical bill) is still zakat-eligible — the rule is based on ownership, not intent.

Liabilities — what reduces your zakat base

Short-term debts you owe can be subtracted from your zakat-eligible cash. Credit card balances, personal loans due within the year, and unpaid bills reduce your zakatable wealth.

Long-term liabilities (a mortgage with decades remaining, a student loan on an extended repayment plan) generally don't offset zakat — only the portion due within the current lunar year does. This follows the majority scholarly view; consult your own scholar if your situation is complex.

A concrete example

Suppose you have $20,000 in checking and savings, $2,000 on a credit card, and the nisab (shown in the calculator above) is around $13,000. Your net zakatable cash is $20,000 − $2,000 = $18,000. Since that's above nisab and you've held it for one lunar year, you owe 2.5% × $18,000 = $450 in zakat.

The calculator above does this math automatically. Enter your cash balance and any short-term liabilities, and it will compute whether you're above nisab and the zakat owed.

Frequently Asked Questions

Do I owe zakat on cash I'm saving for a house or a wedding?

Yes. Savings for future expenses are still zakat-eligible while they're in your possession. The scholarly majority view is that ownership at the time of the zakat anniversary is what matters, not your intended use.

What if my cash dropped below nisab during the year but ended above it?

Schools differ. The Hanafi view checks only the start and the anniversary, so a mid-year dip doesn't break the year; the majority view holds a dip resets the clock until you cross nisab again. If you hover near the line, ask your scholar.

How precise does the nisab figure need to be?

The nisab shown here is computed live from gold spot price (85 grams × current USD price per gram). Gold prices fluctuate daily, and some scholars prefer the silver nisab (a lower threshold). Consult your scholar if you're close to the line — the calculator uses the gold nisab; the silver benchmark is the lower, more cautious threshold.

Can I pay zakat monthly instead of annually?

Yes — many people set aside zakat as a recurring monthly amount and reconcile at year-end. What matters is that the total you pay for the year reflects 2.5% of your zakat-eligible wealth on your anniversary date.

What if I have emergency savings I never spend?

Long-held savings are the most clearly zakat-eligible form of wealth. The one-lunar-year holding period is the primary qualifier; an emergency fund you've had for years definitely qualifies.

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