Islamic Financial Calculators

📋 Master Guidance - Read Carefully: 1. Calculation Methods - When to Use Each:
• Standard Savings (2.5%): For wealth accumulated over a full lunar year. This is the most common method. Debt deductions apply here.
• Yield/Production (5-10%): For annual income/profits. Enter your NET profit (after all business expenses). Debt deductions do NOT apply - expenses should already be deducted from your net profit figure.
• Using Both: If you have both accumulated wealth AND annual income, calculate both separately and add them together.

2. Jewellery:
• Hanafi School: ALL gold/silver jewellery is Zakatable (even if worn regularly).
• Other Schools: Only investment/unused gold is Zakatable. Regularly worn jewellery is exempt.
• Action: Know your school's ruling and include jewellery value accordingly.

3. Debt Deductions (For Savings Method Only):
Tax Debts:
• ✅ Unpaid Self-Assessment tax due TODAY
• ✅ Unpaid Corporation Tax for your business
• ✅ Outstanding VAT owed to HMRC
• ❌ Do NOT deduct estimated future tax (only actual debts owed now)
• Example: Your Self-Assessment shows £5,000 owed. Deduct this amount.

Living Expenses (Immediate Bills):
• ✅ THIS month's rent/mortgage payment
• ✅ THIS month's Council Tax, utilities, groceries
• ✅ Immediate debts due within 30 days
• ❌ Do NOT deduct 12 months of future expenses
• ❌ Do NOT deduct credit card balances you can pay off
• Example: Your monthly rent is £1,200. Only deduct £1,200 (not £1,200 × 12 = £14,400).

4. Business Assets (For Savings Method):
• Ltd Company Bank Account: This is accumulated wealth, use 2.5% method. Calculate on the balance at your Zakat date (after holding for full lunar year).
• Include: Company cash/bank balance, stock/inventory, trade debtors (money customers owe you), business investments
• Exclude: Fixed assets (buildings, equipment, vehicles used in business), personal assets
• Deduct: Company debts (tax owed, loans, bills due, trade creditors)
• Important: Even if the bank balance changes daily, you calculate on the value at your Zakat anniversary date. The changing balance doesn't mean you use yield method - it's still wealth-based Zakat.
• Example: Your Ltd company has £80,000 in bank, £15,000 stock, £5,000 debtors, minus £8,000 debts = £92,000. Zakat = £92,000 × 2.5% = £2,300
• For detailed business Zakat, consult an Islamic accountant like Faraday Keynes.

5. Yield Method - Net Profit Calculation:
• For professional fees: Enter your annual income AFTER deducting all business expenses (office rent, equipment, staff costs, etc.)
• For rental income: Enter net rental income AFTER deducting property expenses (maintenance, insurance, management fees, etc.)
• The calculator will apply 5% (high labor) or 10% (passive income) to this net figure
• Do NOT enter gross income - always use net profit after expenses

Zakat is an act of worship and must be distributed strictly according to Qur'anic guidance (Surah At‑Tawbah 9:60). It is not general charity and cannot be given freely to any cause. Improper distribution may invalidate the obligation.

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1. The 8 Eligible Categories

• The Poor (Al‑Fuqara) – Those unable to meet essential living expenses.
• The Needy (Al‑Masakin) – Those whose income does not cover basic needs.
• Zakat Administrators – Officially appointed collectors/distributors.
• Reconciliation of Hearts – Applied under qualified scholarly guidance.
• Freeing Captives – Classical category; modern application requires scholarly input.
• Those in Debt – Individuals burdened by legitimate debts they cannot repay.
• In the Path of Allah – Traditionally defense; limited contemporary extensions under scholarship.
• The Stranded Traveller – One unable to access funds to return home.

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2. Muslim and Non‑Muslim Eligibility

The majority of scholars (Hanafi, Maliki, Shafi'i, Hanbali) hold that Zakat is distributed to eligible Muslims.

• Eligible poor Muslims → Valid recipients
• Poor non‑Muslims → Not eligible for Zakat (majority opinion)

Some scholars permit giving Zakat to certain non‑Muslims under the category of Reconciliation of Hearts, but this requires qualified scholarly judgment.

Important: Voluntary charity (Sadaqah) may be given to anyone, including non‑Muslims.

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3. Giving Zakat to Charities or Organisations

Zakat may be given to a charity only if it distributes funds directly to eligible individuals within the 8 categories.

Valid Use

• Direct cash assistance to poor/needy Muslims
• Paying off qualifying debts
• Supporting stranded travellers
• Scholarships allocated directly to poor students
• Segregated Zakat funds with clear Shariah policy

Not Valid (Majority Opinion)

• Building mosques
• Constructing schools or hospitals
• Infrastructure projects
• General operational costs
• Equipment purchases

Zakat must transfer ownership (tamleek) to a qualifying individual.

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4. Who You Cannot Give Zakat To

• Parents or grandparents
• Children or grandchildren
• Your spouse
• Wealthy individuals above Nisab

You may give Zakat to siblings, extended family, or married children if they independently qualify.

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5. Zakat Distribution Checklist

• ☐ Recipient falls within one of the 8 categories
• ☐ Recipient is below Nisab threshold
• ☐ Recipient is not someone you are financially obligated to support
• ☐ Need or debt is genuine and lawful
• ☐ Funds will not be used for prohibited purposes
• ☐ Recipient is Muslim (majority opinion), unless under scholarly supervision
• ☐ Intention (niyyah) is made at time of payment

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Final Guidance: If unsure about eligibility, consult a qualified scholar or distribute through a reputable charity with a clear Zakat policy and Shariah oversight.

Understanding Islamic Inheritance (Fara'id): Islamic inheritance law is precisely defined in the Quran and Sunnah. This calculator provides a simplified estimate based on common scenarios.

Key Principles:
• Sons receive twice the share of daughters (2:1 ratio)
• Spouses receive fixed shares (varies if children exist)
• Parents receive fixed shares (varies by scenario)
• Remainder goes to closest male relatives (Asabah)

⚠️ This is a basic calculator. Real inheritance cases often involve:
• Multiple generations (grandchildren, grandparents)
• Complex family structures
• Debts and funeral expenses (paid before distribution)
• Bequests (up to 1/3 of estate for non-heirs)

Always consult a qualified Islamic scholar or Shariah court for official inheritance division.

What are Kaffarah & Fidya? Fidya: Compensation for missed fasts when you are permanently unable to fast (chronic illness, old age, pregnancy complications). Pay £5 per day to feed a poor person.

Kaffarah: Penalty for deliberately breaking a fast during Ramadan without valid reason. Must feed 60 poor people (£300) OR fast for 60 consecutive days.

Example: If you missed 10 days of fasting due to illness and cannot make them up = 10 Fidya days = £50.

Important Notes: • Consult a scholar to determine whether Fidya or Kaffarah applies to your situation.
• Kaffarah is serious and should only be used if you deliberately broke a fast without valid excuse.
• These amounts are based on UK charity guidelines (2026).