How it is calculated
Zakat base = inventory value + cash + collectible receivables − short-term liabilities due- Inventory: valued at market price on the zakat date (wholesale price for wholesalers, retail for retailers, per many contemporary scholars).
- Receivables: amounts customers owe you that you expect to collect; bad debts are excluded.
- Fixed assets are not zakatable: premises, furniture, equipment and vehicles used in the business.
- If the net reaches nisab (value of 85 g of gold), zakat is 2.5%.
Worked example
A shop with inventory worth 200,000, cash of 35,000, collectible receivables of 15,000 and 40,000 due to suppliers: base = 210,000, zakat = 5,250.
Frequently asked questions
Purchase price or selling price?
Inventory is valued at market value on the zakat date — what it would sell for then, not the old purchase cost.
Are machines and equipment zakatable?
No. Fixed assets used to produce or sell are exempt; zakat is on stock, cash and receivables.
Can I pay zakat in goods?
Some scholars allow it when it benefits the recipient more; the norm is to pay its value in cash.
What about partners in a company?
Each partner pays on their share of net zakatable assets, unless the company pays zakat for all.