Is Zakat due on stocks?

Yes, Zakat is due on stocks if they reach the Nisab and a full Hijri year has passed.

How is stock Zakat calculated?

It's calculated at 2.5% of the market value of the portfolio plus distributed dividends.

Does Zakat apply only to trading stocks?

Trading stocks are subject to Zakat on market value. Long-term investment stocks may only owe Zakat on dividends according to some scholars.

What is the Nisab for stocks?

The Nisab equals 85 grams of gold or its equivalent in local currency.

Stock Zakat Calculator

Calculate Zakat on your stock portfolio and dividends

Portfolio Value

EGP

Dividends Received

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Stock Zakat

Total Zakat

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Zakat on Portfolio

Zakat on Dividends

Stock Zakat Calculator: Pay Your Zakat Accurately and With Confidence

Zakat on stocks is one of the most confusing matters for Muslim investors, as calculation methods differ according to Islamic jurisprudence schools and the investor's intent for holding the shares.

Scholarly Opinions on Stock Zakat

Opinion 1: Stocks as Trade Goods If the intent is trading stocks (buying and selling for profit), they are treated as trade inventory: the full market value is subject to 2.5% zakat when the lunar year (hawl) completes.

Opinion 2: Zakat on Underlying Assets If the intent is holding shares to receive dividends rather than trading, zakat is calculated on the company's zakatable assets (a portion of its cash and inventory) rather than the full market value. This opinion makes it easier for long-term investors.

Most contemporary Islamic jurisprudence bodies recommend applying one of the two methods based on the investor's intent.

Practical Calculation Method

For stock traders: Stock Zakat = Total portfolio market value × 2.5%

For long-term shareholders: Obtain the per-share zakatable asset amount (published in annual reports by many Gulf companies), then multiply by your number of shares × 2.5%

Zakat Nisab for Stocks

The nisab equals the value of 85 grams of gold or 595 grams of silver (the lower of the two is used by most contemporary scholars). If your portfolio reaches this threshold and a full lunar year passes, zakat becomes obligatory.

Common Questions When Calculating

Are stocks calculated at purchase price or current market price? The majority opinion: current market price
Are distributed dividends (dividends) zakated separately? They are added to general money and zakated together
What about shares pledged as loan collateral? Multiple opinions exist; the safer approach is to include them

FAQ

Is zakat obligatory on stock mutual funds?▼

Yes. Your share in the fund is zakated using the same methods as stock zakat. Some Islamic funds calculate and disclose per-unit zakat to unitholders, simplifying the calculation.

What is the current zakat nisab in Egyptian pounds?▼

The nisab changes with gold and silver prices. To find the current nisab, check the price of 21-karat gold per gram and multiply by 71.5 grams (approximately equivalent to 85 grams of pure gold). Our calculator computes this automatically.

Must one wait a full lunar year (hawl) before paying zakat on stocks?▼

Yes, the hawl is a condition for stock zakat. Start counting from the day your portfolio reaches the nisab. If it falls below the nisab during the year then recovers, the hawl restarts according to some scholars.

How do I handle shares in companies with some impermissible activities?▼

It is best to avoid investing in companies with inherently prohibited activities. Some scholars permit investment in companies where a small percentage of activities is mixed, with the condition of donating the portion of prohibited income.

Can zakat on stocks be paid as shares rather than cash?▼

The default is to pay zakat in cash as it is most beneficial to the recipient. Some scholars permit donating shares to eligible recipients. Consult Islamic scholars in your country for the most appropriate ruling for your situation.

Results are approximate and for educational purposes only, not financial or legal advice. Consult a certified financial advisor before making financial decisions.