What is Zakat on savings and how do expatriates calculate it?

Zakat, the obligatory annual giving that is one of the five pillars of Islam, applies to wealth that has been held above the nisab threshold for a full lunar year. For many expatriates working in the GCC, calculating it accurately is more complicated than it sounds — because their wealth is spread across multiple currencies, countries, and asset types, each with different rules about what is zakatable.

The nisab — the minimum wealth threshold above which Zakat becomes obligatory — is commonly set at the value of 85 grams of gold or 595 grams of silver. At current prices, the gold nisab is significantly higher than the silver nisab, and scholars differ on which to use. Many contemporary scholars recommend using the silver nisab because it is lower and therefore more inclusive, bringing more Muslims into the obligation. You should follow the guidance of the scholars you trust on this question.

The standard Zakat rate on savings and cash is 2.5 percent of the total zakatable wealth held for a full lunar year. Cash in current accounts, savings accounts, and fixed deposits is generally zakatable. The key question is which assets count: your salary income is not zakatable on its own — only the portion that has been saved and has sat above the nisab for a full year. Money you have spent on living expenses, rent, or bills has already been consumed and does not attract Zakat.

For expatriates, the most common complication is currency. If your savings are split between QAR, INR, and USD, you need to convert them to a single base currency at the time of calculation. Finatha's Zakat calculator does this automatically — it takes your account balances, applies the current exchange rates you have set, and gives you a combined zakatable wealth figure and the 2.5 percent due.

There are categories of wealth that are partially or fully exempt, depending on the school of thought you follow. Personal property (the home you live in, your car, household goods) is generally not zakatable. Business inventory, trade goods, and investment holdings above certain thresholds typically are. If you hold investment accounts, property held for sale, or significant gold and silver jewellery beyond personal use, you may need to include portions of those in your calculation.

The right time to calculate and pay Zakat is on your Zakat anniversary — the lunar date one year after your wealth first exceeded the nisab. Many people find it easiest to align this with Ramadan, though this is a preference, not a requirement. Whatever date you choose, the goal is consistency: calculate at the same point each year, on the same basis, and pay what is due. Finatha's giving planner in the More section helps you track your calculation and set aside the amount before it is needed.