Zakat on Stocks: How to Calculate It

Zakat is the obligatory annual charity due on qualifying wealth held for a full lunar year. Shares are wealth, so they're zakatable — but how much of a holding is zakatable depends on why you hold it.

Two recognised methods

• Active trader (resale intent) — if you buy and sell shares to profit from price moves, the shares are trade goods. Zakat is 2.5% of their full market value.
• Long-term investor (dividend intent) — if you hold for the long term, zakat is due on your proportional share of the company's zakatable assets (its liquid assets — cash, receivables, inventory — not its fixed assets like plant and buildings), again at 2.5%.

The rate: 2.5%

Zakat is levied at 2.5% on a lunar (hijri) year. If you calculate on a solar calendar year instead, scholars use 2.577% to account for the ~11 extra days. Ethiqly's calculator uses the 2.5% lunar rate.

Nisab: the minimum threshold

Zakat is only due if your zakatable wealth meets the nisab — the minimum threshold, defined as the value of either:

• 595 grams of silver, or
• 85 grams of gold.

The silver nisab is almost always the lower figure, so using it means more people qualify and zakat is more likely to be due — the cautious choice that errs toward fulfilling the obligation. Ethiqly defaults to the silver nisab and prices it from live spot rates.

Calculate it on your portfolio

The Zakat Calculator applies both methods to your live holdings, checks them against the nisab, and shows exactly which assumptions it used. Treat the figure as a well-founded estimate and confirm your obligation with a qualified scholar — zakat rulings differ between schools of thought.