Zakat is 2.5% of the wealth you have held for one lunar year, provided that wealth is above the nisab threshold. The maths is simpler than most people expect: add up your zakatable assets, subtract what you owe, check the total against nisab, and if you are above it, give 2.5%.
Step 1: Add up your zakatable assets
Zakat applies to wealth that grows or sits idle, not to the things you use day to day. Include:
- Cash, in the bank and at home
- Gold and silver, including jewellery, valued at current market price
- Shares, managed funds and superannuation you can access
- Money owed to you that you reasonably expect to be repaid
- Business stock and trade goods held for sale
- Investment property income and property bought to resell
You do not pay zakat on the home you live in, the car you drive, your furniture, clothing, or the tools you work with.
Step 2: Subtract what you owe
Deduct immediate debts, such as outstanding bills, rent due, credit card balances and this year’s obligations. Scholars differ on how to treat long-term debts like a mortgage. A common approach is to deduct only the payments due within the coming year rather than the entire loan.
Step 3: Compare the total to nisab
Nisab is the minimum amount of wealth you must hold before zakat becomes due. It is set against two metals:
- Gold: 87.48 grams
- Silver: 612.36 grams
Because metal prices move daily, the dollar value of nisab changes constantly, so check the current gold or silver price in Australian dollars on the day you calculate. Many scholars recommend using the silver nisab, since it sets a lower threshold, which means more people pay zakat and more reaches those in need.
A worked example: if your zakatable assets come to $20,000 and you owe $2,000 in immediate debts, your zakatable wealth is $18,000. If that sits above nisab, your zakat is 2.5%, which is $450.
Step 4: Check the lunar year has passed
Zakat is due once your wealth has stayed above nisab for one full lunar year, known as a hawl. The lunar year runs roughly eleven days shorter than the calendar year, so your zakat date moves earlier each year. Pick a date you will remember, such as a date in Ramadan, and use it annually.
Step 5: Give it to someone eligible
Zakat cannot go just anywhere. The Qur’an names eight categories of eligible recipients, and it must reach people who genuinely qualify. House of Sadaqa keeps zakat funds separate and directs them to eligible families through the Family Support Program, supporting local households facing hardship right here in Sydney. Our full Zakat Policy sets out exactly how.
Giving locally also means it is tax-deductible in Australia, because House of Sadaqa is a DGR-endorsed charity.
Frequently asked questions
How much zakat do I pay?
Zakat is 2.5% of your zakatable wealth, once that wealth has been above the nisab threshold for one lunar year.
What is the nisab threshold?
Nisab is 87.48 grams of gold or 612.36 grams of silver. Because metal prices change daily, convert the weight at the current market rate on the day you calculate.
Should I use the gold or silver nisab?
Many scholars recommend the silver nisab because it sets a lower threshold, meaning more people become liable and more support reaches those in need. Practice varies, so follow the guidance of a scholar you trust.
Do I pay zakat on my house and car?
No. Zakat is not due on your primary home, your car, furniture, clothing or the tools of your trade. It applies to wealth such as cash, gold, silver, shares and trade goods.
Do I pay zakat on superannuation?
Scholars differ. A common view is that zakat applies to the portion you can actually access or withdraw. Speak with a qualified scholar about your circumstances.
Is zakat tax-deductible in Australia?
Yes, when given to a charity endorsed as a Deductible Gift Recipient. House of Sadaqa is DGR-endorsed, so zakat given through us is deductible for gifts over $2.
This article is general guidance, not a religious ruling or financial advice. Scholars differ on several points, particularly the treatment of debts, superannuation and gold jewellery. For your specific situation, please consult a qualified scholar.
Support the work behind this article
House of Sadaqa is a registered Australian charity helping local families in crisis with household essentials, whitegoods and emergency relief. There are three direct ways to be part of it:
- Donate, with donations over $2 tax-deductible
- Volunteer your time in the warehouse, on outreach runs, or at events
- Clear a NSW fine through a Work and Development Order
You can also support us without donating a cent, simply by choosing one of our social enterprises. Each one puts its profits back into supporting families:
- Goodwill Connect, NBN internet for Greater Sydney
- Panda Paper, premium bamboo toilet paper delivered to your door
- The Goodwill Laundry, self-serve laundry in Bankstown
- The Goodwill Shop, our op-shops in Revesby and Bankstown