The link between Zakat and Umrah is something that, firstly, I feel we don’t always talk about the meaningful connection. Zakat, is one of the five pillars of Islam and it is compulsory for every Muslim whose wealth meets a certain minimum level. Umrah is a non-mandatory pilgrimage, but one that only becomes realistically attainable when the money aspect of a Muslim’s life is such that they can afford to plan and pay for it. Often, the same Muslim that sits down to work out how much Zakat is due on them is the same Muslim who is now starting to ponder at what point in time they may be able to travel/afford a ticket to Makkah.
Knowing how to calculate Zakat correctly is a goal in itself because it is not just charity, but also an obligation. It does however help you to get a clearer view of exactly where you are financially which is directly important for planning an Umrah trip. However, the Zakat is an obligatory action if your wealth has reached Nisab threshold and a complete lunar year has passed. If you have savings consistently beyond that amount, you’re probably good to go looking at umrah packages available from UK companies who can handle your budget accordingly.
This step by step guide explains how to calculate Zakat in the clearest, most transparent manner possible with worked examples for UK Muslims wanting to get this right.
How to Figure Out Zakat on Your Wealth
Finding everything you own that is zakatable wealth and then deducting all immediate debts from those totals before simply applying the 2.5% rate on top of whatever remains (assuming it’s above nisab has been owned for a full lunar year, at minimum).
For UK Muslims zakatable wealth can be generally classified as follows:
Cash and bank savings It includes instant access accounts, savings accounts, cash in the house or any money that you have sitting in fixed-term deposits and ISAs. Any cash in your possession for a lunar year is zakatable as liquid cash.
Investments When dealing with shares, stocks, unit trusts and similar holdings, they are to be zakat from their market value at your Zakat taking place date. Pension funds are a more nuanced topic where academic debate exists, we recommend consulting an expert qualified to give precise Islamic advice on pensions.
Business assets stock that is intended for sale shall be zakatable and its value based on current market prices. The equipment, premises and tools used by an entrepreneur in running the business are normally not zakatable. Trade receivables (money owed by customers of your business) become zakatable once it is reasonable to expect payment to be received.
Debts owed to you money that people owe you and which you expect to receive on a periodic basis is zakatable. We generally exclude money that is unlikely to be recovered, though scholars disagree on this.
Deducting debts from your calculation You have zakatable assets and tax has to be paid at 2.5% of the total amount (after deducting any immediate liabilities,). Existing debt is the debt that you carry on credit cards, short term loans or for bills which are already overdue. In most cases, you should exclude debt that is currently due and able to be offset from long-term obligations, as your mortgage burden (and I think most scholars would argue that the monthly payment obligation can deduct the monthly payment obligation alongside offsetting total loan amount outstanding.)
How Do I Calculate Zakat on Gold?
It is also still the one of the most commonly misunderstood areas of Zakat calculation for UK Muslims as many households own gold jewellery instead of bars or coins, which has been subject to conflicting scholarly opinions over whether it is zakatable.
The Hanafi position According to, gold jewellery with nearly all South Asian Muslims in the UK, is zakatable regardless of whether they wear it currently or store it. You are obligated to pay Zakat on your gold jewellery if it meets or adds up to the Nisab threshold.
To calculate Zakat on gold jewellery:
The first step is to calculate your gold weight in grams. A jeweler can do this for you if you do not have an exact scale. Be mindful about the karat of gold. In all cases, 24k is pure gold, 22k is 91.7% gold and 18k is 75% gold. Now multiply the weight into the purity percentage to extract the pure gold content. Multiply the answer by the current price of gold per gram in the market for calculating its value.
I.E: 50 grams of 22k gold jewellery contains 45.85 grams of solid gold. The value of that jewellery you have is approx £2,980 and the gold price is about £65 a gram (find the current rate on your Zakat anniversary date).
When you are calculating your total zakatable assets, add that amount in with the other zakatable assets.
Using gold prices from your actual Zakat anniversary date Gold can swing week to week considerably (and using antiquated pricing is incorrect). In GBP, UK gold prices are available every day from, for example, the London Bullion Market Association (LBMA) published by a simple search on your chosen calculation date.
How Is Zakat Calculated?
Once you have identified your zakatable assets, the Zakat calculation is a simple process.
Step 1: Establish your Nisab threshold
Nisab is the minimal amount of wealth an individual is eligible for Zakat assessment. Either 87.48 grams of gold, or the equivalent value (612.36 grams) of silver defines it. All that you need is to get over one of those thresholds. As a point of Guide (the gold Nisab is between £5,000 to £6,000 in GBP depending on the price of gold and the silver Nisab is about £416 to £550). The silver Nisab is generally utilized among Hanafi Muslims, the threshold for eligibility is lower, so more people are eligible, resulting in more Sadaqah being directed to those who need it. Other madhabs utilize the gold Nisab.
Step 2: Total your zakatable assets
Combine your money, deposit balances, value of gold, value of silver, investment value and what you owe for company purchase.
Step 3: Subtract immediately due liabilities
Deduct balances on credit cards, unpaid bills and short-term debt that you are required to pay within the next couple of months.
Step 4: Check the result against Nisab
If your total zakatable wealth is above the Nisab threshold for a lunar year (Hawl – 354 days), you are liable to pay Zakat
Step 5: Calculate 2.5%
Then, you take your net zakatable wealth and multiply this by 0.025. Well, this is how much Zakat you have to pay.
Important: Zakat is 2.5% of your total net zakatable wealth, not 2.5% of the amount above the Nisab. After your wealth reaches the limit, 2.5 percent is then charged on all of it at once.
What Is Zakat Nisab in the UK?
The Nisab was established by Prophet Muhammad ﷺ a value of 87.48 grams of gold or 612.36 grams of silver. As we do not use gold and silver as currency any more, the nisab is calculated in GBP today i.e., these weights are multiplied by the current market price.
Gold Nisab: With 87.48 grams of gold (roughly between £5,000 and £6,500 depending on the gold price at calculation date).
Silver Nisab: 612.36 grams of silver roughly £416 to £550 in GBP depending on the silver price
The Gram weights (87.48g gold, 612.36g silver) and the daily published line in GBP of both the gold and silver Nisab appear from major UK Islamic charities such as Islamic Relief, National Zakat Foundation, so feel free to cross reference against spot prices as needed
Why do Nisab values fluctuate?
This is the case as they are directly correlated to the daily market price of these precious metals. This is why you must use your actual Zakat anniversary date prices, and not an averaged figure from last month or last year.
Which Nisab should UK Muslims use?
The value of silver applies to calculate the Nisab threshold and Zakat for Hanafi madhab. The other madhabs benefit from the amount of gold. Islamic Relief recommends donors apply the silver value which is almost always a lower bound because this enables more to be eligible for Zakat thus more help for Zakat recipients.
If you cannot decide which to use, consult a qualified Islamic scholar who is fluent in understanding your madhab and personal circumstances.
What Assets Are Included in Zakat?
The following assets are generally included in Zakat calculations for UK Muslims:
Savings and cash all liquid assets in chequing accounts, savings accounts, cash ISAs and cash at home summed over a lunar year
Gold and silver of any form, be it jewellery/coins/bars at spot price Zakat is obligatory on gold when it reaches the Nisab of 87.48g, while silver has a Nisab of 612.36g; this applies to gold and silver in all forms of jewellery, coins or raw metal.
Investment Zakat is due on stock and shares which are held for investment (not as a trade), valued at current market price on your Zakat anniversary date.
Business stock assets classified as available for sale at their fair value
Money owed to you trade receivables and personal loans that you expect to recover.
Assets generally excluded are limited to your main home, car, clothes, personal furniture and business tools used for work but not held for sale.
What Debts Can Be Deducted From Zakat?
Liabilities omitted or assets double-counted to list a savings account, and then the cash in that bank is also counted as being held in a fixed deposit (the same money), or failing to subtract a credit card balance both distort the result. Start with bank statements, not memory.
The kinds of debt that are normally deductible include outstanding credit card balances payable on demand, unpaid bills and rent, personal loans due for payment immediately on demand, and tax debts to HMRC for the particular accounting period.
Mortgages: Simply deduct the payment or payments due currently rather than the full remaining principal. This is where most academic scholars come to a generic position, by deducting the total mortgage amount from assets would mean that Zakat liabilities are reduced to virtually nothing for many UK home owners and does not align with the intent of the obligation.
When Should You Pay Zakat in the UK?
Zakat shall become due when two conditions apply: that you have reached the Nisab of zakatable wealth (or above it); and that you have had that amount at this threshold or higher for a lunar year and in its entirety (Hawl).
Zakat is calculated on the day of your annual lunar calendar anniversary. If the total wealth was less than Nisab at some time but more than Nisab thereafter before the anniversary date: scholars differ (conflicting concerns) and following a conservative approach one should observe in both cases, when his/her initial/ending of lunar Year Zakat is above or below / equal/in excess of the value of property.
In the UK, Ramadan is popularly also associated with giving Zakat because many Muslims do pay their Zakat during this month (as the rewards for doing acts of worship are believed to be multiplied manifold). Which is completely valid practice, since your lunar year has passed. It is also permissible to pay Zakat before commencement of Ramadan, or during any time in the month following the fulfilment of the Hawk condition.
Common Mistakes to Avoid When Calculating Zakat
Mixing up Nisab with minimum Zakat Nisab is the entry threshold. When your level of wealth equals it, you are charged 2.5% on the total net wealth not above the threshold (not on the portion above it).
Using outdated gold or silver prices. In a week, gold is capable of moving several pounds per gram. This means using the prices of your actual calculation date.
Forgetting to include gold jewellery. A majority of UK Muslim women possess gold jewellery wealth, if worn regularly that is strictly banned from Zakat. Thus according to the Hanafi position, wearables jewelry is still zakatable.
Deducting long-term liabilities in full. If you use the total balance remaining on your mortgage instead of the next payment due, you’ll get a wrong and most likely unusable calculation.
Working from memory rather than records. Get your bank statements, investment valuations, and an up-to-date gold price for the anniversary date. Accurate figures produce accurate Zakat.
Not knowing your Zakat anniversary date. If you never created one just pick a date and stay consistent year after year. Several scholars give the 1st of Ramadan as a convenient fixed date.
Zakat Calculation Example for a UK Muslim
So here’s an example exercise for this year, let’s assume we have UK Muslim (say Ahmed) living in Manchester calculating Zakat.
Ahmed’s zakatable assets:
- Bank savings: £8,000
- Cash at home: £500
- Gold jewellery (wife’s, 60g of 22k gold currently worth £65 per gram): £3,588
- Stocks & shares ISA current worth: £4,000
- Money owed to him by a friend (to be repaid): £500
- Total zakatable assets: £16,588
Ahmed’s immediately due liabilities:
- Credit card balance: £800
- Outstanding council tax: £200
- Total deductions: £1,000
Net zakatable wealth: £15,588
Nisab check: Ahmed’s silver Nisab (Hanifa madhab) is approximately £450 at current silver prices. £15,588 clearly exceeds this threshold.
Hawk check: It is the full lunar year that Ahmed’s wealth has been above Nisab level.
Zakat due: £15,588 × 2.5% = £389.70
This is reflected in where Ahmed has decided to pay his Zakat in Ramadan and how much of his remaining savings he is now happy to spend having clearly mapped out their finances to begin researching Umrah packages from UK providers for a visit later in the year.
Conclusion
Zakat calculation is not as complex as it sounds at the first instance. The process is straightforward, you take your zakatable wealth, apply immediate liabilities (if any), check to see if the remainder meets the Nisab threshold and then give away 2.5% of it if it does.
This is the matter of taking current gold and silver prices correctly, it is a matter of using real bank statements instead of approximations and applying the true Nisab based on your madhab.
For anything requiring some complexity; Pensions, mixed purposes for business assets i.e. where parts of the company are investment parts involved inherited wealth or large amounts of gold we recommend you work with a qualified Islamic scholar or properly qualified Islamic finance advisor for personal perspective as everyone will be different.
When you have done your Zakat calculation, and have purified your wealth, having fulfilled your obligation this is the perfect time to reflect on what comes next in worship. The next step for many UK Muslims is Umrah. We offer 3-star, 4-star and 5-star Umrah Packages from £655pp including flights, visa & hotels in Makkah and Madinah, so if you are at that stage then please contact us to organise an Ideal package based on your dates/budgets.
