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Zakat on Pension

Zakat on a pension depends on how much of it you can access. Money you could withdraw is generally zakatable; a fully locked pension is treated more cautiously, often at a portion of its value. This guide covers workplace pensions, provident funds and retirement accounts, with the calculator below.

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Gold, pure 24 carat
Silver, pure

Spot prices update automatically. Local retail rates can differ, so overwrite either box if your market prices gold higher.

Net zakatable wealth
0
Below nisab
Silver nisab0
Gold nisab0
01Cash and bankEverything liquid on your zakat date0
Cash in hand
Current and savings accounts
Fixed depositsCapital only. Interest is not yours to keep or to pay zakat on.
Digital wallets and prepaid balances
Money set aside for a future purposeHajj savings, a wedding fund, a deposit. Still yours, still zakatable.
Foreign currency heldConverted into your currency
02GoldBy weight and carat, or by value0
By weight
Gold you ownPurity is applied automatically
A second holding, different carat
Of that, worn as personal jewellery
By value
Coins, bars or other gold you already valued
Weight allowances many scholars permit: deduct roughly 2% for stones set into jewellery and about 25% for kundan work, since the setting is not gold. Enter the adjusted weight above.
03SilverJewellery, utensils, artefacts, bullion0
Silver you own
Silver you already valued
Household silver counts in full: cutlery, crockery, trays and decorative pieces. It is not exempt for being in daily use.
04Investments and savingsShares, funds, pensions, crypto0
Shares held to tradeFull market value on your zakat date
Shares held long termEnter the zakatable share of the company's assets if you know it, otherwise use about 25% of market value as a common estimate.
Dividends received and still held
Mutual funds, unit trusts, sukuk
Pension or provident fund, your accessible balanceYour own contributions plus any portion you could withdraw today
CryptocurrencyMarket value on your zakat date
Takaful or insurance, surrender value
Government deposits and refundable securities
05Money owed to youOnly what you expect to actually recover0
Loans you gave to family or friends
Salary, fees or refunds due to you
Rental income received and still held
Leave out anything you have effectively written off. A doubtful debt becomes zakatable in the year it is actually repaid.
06BusinessStock in trade, receivables, payables0
Saleable stock, at landed cost
Damaged or dead stock, at scrap value
Raw materials and finished goods
Owed to you from credit sales
Business cash and bank balances
Less: owed to your suppliers
Less: bad debts written off
Partnership share
Your capital balance, last accounts
Loans you advanced to the firm
Your estimated profit since then
Less: your drawings this year
Premises, machinery, vehicles and fixtures carry no zakat. Only what you bought to sell, and the cash the business holds.
07PropertyHeld to sell, not to live in0
Land or property bought to resellCurrent market value
Not zakatable: the home you live in, however many you own for family use, and property you rent out. Rent you have already collected and still hold does count, and belongs in section 05.
08What you oweDeductible within the next 12 months0
Borrowed money and goods bought on credit
Loan and mortgage instalments due in the next 12 monthsOnly the coming year, not the whole outstanding balance
Rent, utilities and bills already due
Wages owed to staff
Tax due now or overdue
Do not deduct bills that are not yet due, long term debt beyond the next 12 months, or any interest element. Interest is not a debt Islam recognises for this purpose.
09Farm produceUshr, calculated separately0
Ushr is a separate obligation with its own rules. It falls due at every harvest, not once a lunar year, and its threshold is roughly 653 kg of the crop, not the cash nisab. It is kept out of the figure above and reported on its own.
Value of produce watered by rain or springs10%
Value of produce watered by pump, canal or well5%
Value of produce watered by both7.5%
10Grazing livestockPaid in animals, not in cash—
Livestock zakat is not a percentage of value. It follows fixed bands and is paid in animals. Any calculator that charges you 2.5% of your herd's worth is wrong. Enter your numbers and this will tell you what is actually due.
Sheep and goats, free grazing, over one year
Cattle and buffalo, free grazing
Camels, free grazing
Poultry, fish farms and stall fed animals raised to sell are trade stock, not grazing livestock. Put their value in section 06 instead.

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This is sadaqah, not zakat. Your zakat belongs to the eight categories entitled to receive it, and this does not count as one. Please pay your zakat to them separately.
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Free to use, kept free by people like you

If this helped, help it keep going

This calculator will always be free, with no ads and no account. Your gift keeps it online and supports the work behind it: building tools and media that serve the Muslim community, and supporting the person who maintains them.

This is sadaqah, not zakat. Your zakat belongs to the eight categories entitled to receive it, and this does not count as one. Please pay your zakat to them separately.
Give whatever you wish

You set the amount on PayPal's secure page. No minimum, no card details shared with us, and nothing you typed above travels with it.

Zakat due 0

Your zakat summary

Send it to yourself, or to whoever pays it with you.

The key factor: can you access it?

Zakat on a pension turns on accessibility. Zakat is due on wealth you own and can dispose of. A pension you could withdraw today is clearly yours; a pension locked until retirement is yours in ownership but not yet in your control. Scholars therefore treat the two differently, and there is a spread of respected opinion.

Accessible pensions and provident funds

Where you can access the money, for example your own contributions to a provident fund, or a pension you are entitled to draw, the accessible balance is treated like any other savings and is zakatable at 2.5% each year, provided your total wealth is above the nisab.

Locked pensions

For a pension you cannot access until retirement, such as many workplace schemes, 401k plans, or the employer-locked portion of a provident fund, scholars differ:

  • Pay annually on a portion. A widely used cautious method takes about 30% of the fund value, representing its liquid zakatable share, and pays 2.5% of that.
  • Pay on the accessible amount after penalties. Some calculate what you could withdraw today net of penalties, and zakat that.
  • Defer until withdrawal. Others hold that zakat is only due once the money is actually received, then paid for that year.

All three positions are held by qualified scholars. The most cautious, and a safe default, is to pay something each year rather than nothing.

Example (cautious method)

A locked pension is worth 100,000. Taking 30% gives 30,000 as the zakatable portion. Zakat is 30,000 × 2.5% = 750 for the year.

Get it right for your scheme

Pension rules vary by country and scheme, so for a large fund it is worth confirming the approach with a qualified scholar. Enter your accessible pension balance in the calculator above, or see zakat on shares and investments and how to calculate zakat.