How to calculate Zakat on a business
Business Zakat is a short formula once you know which assets count: trading cash, saleable stock and collectable debts, minus what's due now.
To calculate business Zakat: on your Zakat date, add trading cash, inventory at current selling value, and strong receivables; subtract eligible current liabilities; and apply 2.5% to the net, combined with your personal wealth. Fixed operating assets — premises, equipment, vehicles used to run the business — are excluded.
Cash, stock and receivables.
Business Zakat is based on the assets you trade with. On your Zakat date, add together your business cash and bank balances, your saleable inventory valued at its current selling or wholesale price, and strong receivables you expect to collect. These are the trading assets that carry Zakat.
Premises, machinery, furniture and vehicles used to operate the business are not Zakatable inventory.
What the business owes now.
Deduct eligible current liabilities — supplier invoices and debts due in the near term. As with personal Zakat, long-term financing is not deducted in full; only what is currently or imminently payable reduces the figure. Reconcile to a dated balance sheet so nothing is missed or double-counted.
Combine and pay.
Take the net business figure, add it to your personal Zakatable wealth, compare the combined total with Nisab, and apply 2.5%. Take care not to count company cash both in the business figure and again personally.
Questions people ask.
How do I calculate Zakat on my business?+
Add trading cash, inventory at current value and strong receivables on your Zakat date, subtract eligible current liabilities, and apply 2.5% to the net combined with your personal wealth. Fixed operating assets are excluded.
How do I value my stock?+
At its current selling or wholesale value on your Zakat date, removing obsolete or unsaleable items — not the price you originally paid or the book value.
Do I include business equipment?+
No. Equipment, premises and vehicles used to run the business are fixed operating assets, not Zakatable trading stock, unless they are themselves held for sale.
Use the private calculator.
Your entries are processed in the browser and are not stored.