What Needs to Be Included in My Zakat Calculation?
Zakat is calculated on your personal assets and held monies, although only on physical goods that do not contribute to comfortable day to day living. For example, you would only calculate Zakat on a second property, not the one you live in. The same with calculating Zakat on a vehicle - it is not due on the first but any additional cars must be included in your calculation.
Your assets are considered a total sum of the following:
• Cash in savings, either in the bank or at home
• Funds raised for special circumstances, i.e. wedding, hajj, property deposit
• Total value of owned gold and silver
• Total value of held shares at market value
• Total value of the stock you hold if you own or run a business
• Total value of rental income from owned property
• Any money in debt to you that you expect to see returned
Anyone who owns multiple properties should only include the gathered rental income and any profit at the time of sale towards their Zakat calculation.
The following is not considered in the Zakat calculation or are considered your liabilities:
• Personal items including clothing and appliances
• Money owed to others including card debts, mortgages and personal loans
• Rent or mortgage payment for the month you pay Zakat
• Bills that are outstanding in the month you pay Zakat
For business owners:
• Any business expenditures such as rates, salaries, bills and rent
• Short-term business loans or business overdrafts
To work out your total wealth there is a simple calculation you can use:
Personal or business assets less short-term liability equals your wealth.
Where your wealth is higher than the calculated Nisab threshold, you are eligible and expected to pay Zakat.