The correct answer to this question can elude even the most devout of Muslims so our aim here will be to clear the air on the subject and provide some guidance. The whole idea behind Zakat is quite simple; help those in need. Most people chose to do so financially which is also the preferred way of helping nowadays, since monetary donations pay for medicine, school books, food supplies and other provisions necessary for survival.
Zakat is one of the five fundamental pillars of Islam. It is covered in great length in the Holy Quran and there are volumes upon volumes on the subject in Islamic literature and Hadith. Every able Muslim is required to pay Zakat every year. The ultimate question is how much they are required to contribute towards Zakat.
Notice that we used the word ‘required' because again; we'd like to emphasize the point that Allah (S.W.T) has made Zakat compulsory (fard) on all Muslims who are able and eligible to do so. This eligibility is determined based on Nisaab (minimum Zakatable amount). If a person's net yearly income exceeds Nisaab, they are required to pay Zakat for that year. Nisaab values change every year based on inflation and gold rates. As a reference, the Nisaab amount in 2012 was $4950.
Calculating, how much Zakat you owe, can be done by taking the following steps.
We hope this post will make calculating Zakat a little easier. For your convenience, Muslim Aid has a very efficient and accurate calculator that makes the process of calculating Zakat simple and easy. Just fill in some numbers and hit ‘Calculate' and it will tell your total net assets and the Zakat amount that you are liable for based on it. Here is the link.
May Allah reward you for your kind contribution and assist you in completing this important faridha. Ameen!