How it is calculated
1) Shares held for trading
Treated like trade goods: zakat is 2.5% of market value on your zakat date.
2) Shares held for long-term investment (for dividends)
- If the company pays zakat on behalf of shareholders (as Saudi-listed companies do to the zakat authority), many contemporary scholars hold no further zakat is due on the shares themselves.
- Otherwise, zakat is on your share of the company’s zakatable assets (cash, receivables, inventory), not the market price: zakat = shares × zakatable assets per share × 2.5%
Zakatable assets come from the company’s financial statements or zakat reports published by some exchanges and Shariah boards.
Cash dividends are added to your cash and zakated with it.
Worked example
You hold 1,000 shares at 50: if for trading, zakat = 50,000 × 2.5% = 1,250. If for investment with zakatable assets of 12 per share, zakat = 1,000 × 12 × 2.5% = 300.
Frequently asked questions
How do I find zakatable assets per share?
Add cash, receivables and inventory from the balance sheet and divide by the company’s shares outstanding. Some bodies publish this figure.
Do I pay zakat on losing shares?
Yes if held for trading — zakat is on current market value regardless of purchase price.
What about investment funds?
Units follow your intention: trading on market value, investment on the fund’s zakatable assets.
What if my shares alone are below nisab?
Nisab applies to all your zakatable wealth combined. Add the result into the comprehensive calculator.