How to Calculate Zakat on Business Activities – Explained in 8 Clear Steps
Egypt’s Dar Al-Iftaa explains how to calculate Zakat on business assets in eight clear steps, clarifying the criteria for valuation, deduction, and the required 2.5% payment once the wealth reaches the Nisab and a full lunar year passes.
Dar Al-Iftaa Egypt has detailed the correct method for calculating Zakat on commercial activities, noting that it applies to all profit-generating businesses, known in Islamic jurisprudence as “Trade Goods” (ʿUrūḍ al-Tijārah).
The obligation is based on the Quranic verse:
“O you who believe, spend from the good things you have earned.” [Al-Baqarah: 267]
The Prophet Muhammad ﷺ also instructed Muslims to give charity from what they prepare for sale.
According to Dar Al-Iftaa, Zakat on business assets should be calculated in eight key steps:
Evaluate the goods for sale at wholesale market value on the Zakat due date.
Add all cash, gold, silver, and confirmed debts owed to the trader.
Deduct debts owed by the trader from total assets.
Calculate Zakat on the remaining amount once it reaches the Nisab.
The Nisab equals the value of 85 grams of 21-karat gold.
The Zakat rate is 2.5% (one-quarter of one-tenth).
A full lunar year must pass since owning the assets.
Zakat is paid in cash, as per the majority of scholars.
Dar Al-Iftaa emphasized that Zakat recipients are limited to the eight categories mentioned in the Quran:
“Alms are only for the poor, the needy, those employed to collect them...” [At-Tawbah: 60]
Zakat cannot be given to those whom the payer is obligated to support financially, such as parents, children, or spouses.
It also clarified that bank savings are subject to Zakat at 2.5% once they reach the Nisab and remain for one lunar year.
Finally, Dar Al-Iftaa highlighted the virtues of Zakat, describing it as a pillar of Islam, a means of purifying the soul, strengthening social bonds, bringing blessings to wealth, and ensuring salvation on the Day of Judgment.
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