What is Zakat? Meaning, Rules, and How to Pay Zakat in Australia

Zakat is an obligatory form of charity in Islam that purifies wealth and supports people in need. It is one of the Five Pillars of Islam and a practical system of social responsibility that helps strengthen the Ummah.

If you are looking to pay Zakat, donate Zakat, or give Zakat in Australia, this guide explains the rules in a simple way and shows you how to calculate your Zakat accurately.

Quick Answer

• What is Zakat? A mandatory charity due on eligible wealth.

• Who pays it? Adult Muslims whose net eligible wealth is at or above the Nisab.

• How much is it? Usually 2.5% of Zakatable wealth.

• When is it due? Commonly after one lunar year (Hawl) on eligible wealth.

• How do I calculate it? Use a Zakat Calculator or calculate manually using the steps below.

• How do I give it? You can donate Zakat online through a trusted Zakat-eligible appeal.

Zakat vs Sadaqa: what's the difference?

• Zakat is mandatory if you meet the Nisab and other conditions.

• Sadaqa is voluntary and can be given at any time in any amount.

Both are rewarding, but Zakat has specific rules about calculation and who can receive it.

Who must pay Zakat?

You generally must pay Zakat if you:

• Are Muslim and an adult

• Have net eligible wealth that reaches the Nisab

• Have owned that wealth for one lunar year (known as Hawl) in many common cases

If you are unsure, it’s best to use a Zakat Calculator Australia tool or speak with a qualified scholar for edge cases (business structures, complex investments, superannuation access rules, and so on).

What wealth is Zakat paid on?

Zakat is typically due on Zakatable assets such as: 

• Cash in hand and bank savings

• Gold and silver (including jewellery in many opinions)

• Shares, stocks, and investments

• Business inventory intended for sale

• Trade goods and receivables you reasonably expect to collect

Not usually Zakatable (common examples):

• Your primary home

• Your personal car

• Personal items not held for resale or investment

What can you deduct before calculating Zakat?

To find your net Zakatable wealth, you subtract eligible liabilities from your eligible assets.

Common deductions include:

• Debts that are due in the short term

• Bills or repayments you must pay soon

• Immediate personal obligations you genuinely owe

What is Nisab?

Nisab is the minimum threshold of wealth you must own before Zakat becomes due. It is traditionally benchmarked against:

• 85g of gold, or

• 595g of silver

Many people choose the silver Nisab because it typically makes more people eligible, increasing benefit to those in need.

Because gold and silver prices change, Nisab values change too. The simplest option is to use a Zakat Calculator that applies the current Nisab values it is using.

How is Zakat calculated?

For most people, Zakat is calculated at 2.5% of your net Zakatable wealth once you meet Nisab.

1. Add up your Zakatable assets (cash, savings, gold/silver, shares, business stock, etc.).

2. Subtract eligible liabilities (debts due, bills, short-term obligations).

3. Compare what’s left to the Nisab (gold or silver benchmark).

4. If you are at or above Nisab, calculate 2.5% of the remaining amount.

Sadaqa Welfare Fund provides an online Zakat Calculator designed to make the process simple.

Who can receive Zakat?

The Qur’an (Surah At-Tawbah 9:60) outlines eight categories of people eligible to receive Zakat, including:

1. The poor

2. The needy

3. Those employed to administer Zakat

4. Those whose hearts are to be reconciled

5. Those in bondage

6. Those in debt

7. In the cause of Allah

8. The stranded traveller

This is why it is important to donate Zakat through causes and programs that are clearly Zakat-eligible and distributed according to Islamic rules.

How to pay Zakat online in Australia

If you want to pay Zakat or give Zakat online, here’s a simple flow:

1. Calculate your amount using a Zakat Calculator.

2. Choose a Zakat-eligible appeal that matches your intention (emergency relief, food, water, orphan support, and more).

3. Complete your donation and keep your receipt for records.

Is Zakat tax deductible in Australia?

In Australia, donations may be tax deductible when they meet ATO rules and are made to an organisation endorsed as a Deductible Gift Recipient (DGR).

Because personal tax circumstances vary, treat this as general information and check the ATO guidance or your accountant if you are unsure.

FAQ: Zakat Australia

How do I calculate Zakat in Australia?

Add your Zakatable assets, subtract eligible liabilities, then if you meet Nisab, pay 2.5% of the net amount.

What is the best way to calculate Zakat accurately?

Use a reliable Zakat Calculator that applies the Nisab values it is using and lets you include common assets and liabilities.

What is Nisab and why does it matter?

Nisab is the minimum threshold that determines whether Zakat is due, traditionally based on 85g gold or 595g silver.

Can I pay Zakat online in Australia?

Yes. You can calculate your amount and donate Zakat online through Zakat-eligible appeals.

Who can receive Zakat?

The Qur’an specifies eight eligible categories (Surah At-Tawbah 9:60), which is why Zakat should be distributed according to clear rules.

Is Zakat tax deductible?

Donations may be tax deductible if they meet ATO rules and are made to a DGR-endorsed organisation.

Ready to calculate and pay your Zakat?

Use the Sadaqa Zakat Calculator to calculate your Zakat and pay Zakat online through a Zakat-eligible appeal.