Zakat Exemption Limit

The lowest amount of money/wealth/savings that, if reached or exceeded, makes zakah (zakat) obligatory. It is not obligatory, that is the owner pays no zakat, if the amount of his accumulated wealth is less than this level. Generally, it can be defined as the amount of wealth that is necessary to provide for an average family for one year.

As a matter of fact, zakat exemption limit (in Arabic nisab) differs across different kinds of property (currency, land, livestock, stock investments, etc). For example, the minimum amount of zakatable gold or golden currency is 20 mithqal (one mithqal is 4.25 grams, so 20 mithqal is approximately equivalent to 85 grams of pure gold). For silver, it is 595 grams of pure silver. For other forms of money and wealth, nisab is typically scaled to that of gold’s minimum zakatable amount (85 grams). Therefore, zakat on wealth kept in a savings amount will be payable only if the balance is equal, at least, to the price of 85 grams of gold of 999-type. In other words, zakat becomes obligatory if an individual possesses wealth equal to or in excess of nisab in the beginning and at the end of a lunar (hijri) year, regardless of his actual wealth in between these two dates.

This amount is also known as a minimum zakatable amount.