Zakat in Malaysia: Nisab, the 2.5% Rate, and How to Calculate It

Zakat is one of the five pillars of Islam and one of the most precisely defined obligations in Islamic jurisprudence. Unlike many religious duties, it comes with specific arithmetic: a fixed rate of 2.5%, a minimum threshold called the nisab, and a holding period called the haul. Once those conditions are met, the obligation is clear. This guide walks through how nisab is derived from gold, how the 2.5% rate applies to each of the four main asset types recognised by Malaysian zakat authorities, and how the payment links to your income-tax rebate.

What zakat is — and the five pillars context

The five pillars of Islam are: Shahada (declaration of faith), Solat (prayer), Saum (fasting in Ramadan), Zakat (obligatory almsgiving), and Hajj (pilgrimage to Mecca). Zakat is the pillar with the most direct financial mechanics. It is not voluntary charity (that is sadaqah); it is a structured redistribution of wealth from those who hold assets above the nisab threshold to eight categories of recipients defined in the Quran — including the poor, the indebted, and those working to collect and distribute zakat itself.

In Malaysia, zakat is administered by state-level authorities — Lembaga Zakat Selangor (LZS) for Selangor, Pusat Pungutan Zakat MAIWP (PPZ-MAIWP) for Kuala Lumpur and Putrajaya, and equivalent bodies in each other state. Each authority publishes its own nisab figures, uruf limits, and accepted calculation methods, which is why the numbers vary slightly across the country. All references in this guide use publicly available figures from LZS and PPZ-MAIWP.

The nisab: 85 grams of gold (and why it moves)

The nisab is the minimum wealth threshold below which zakat is not obligatory. For the asset types covered here — income, savings, gold, and business capital — Malaysian authorities use the gold nisab of 85 grams (rather than the silver nisab of 595g, which would give a much lower threshold and is less commonly applied in Malaysian practice for these categories).

Because nisab is pegged to gold by weight, not to a fixed ringgit amount, the monetary threshold moves whenever the gold price moves. The formula is simple:

Nisab formula

85 g × gold price/g

Default gold price

RM 611.70 / g

Default nisab

≈ RM 51,994.50

PPZ-MAIWP reference

RM 33,996 (earlier snapshot)

The default price of RM 611.70 per gram is Lembaga Zakat Selangor's published reference rate as of 2026-06-07. PPZ-MAIWP published a nisab of RM 33,996 — that figure reflects an earlier gold price snapshot and illustrates why the threshold differs across states and across time. State authorities typically revise their published nisab figures every six months. Always verify the current nisab with your state zakat authority before calculating.

The haul: one lunar year of continuous ownership

A second condition applies alongside nisab: the haul (or hawl), meaning the asset must have been held above the nisab for a complete lunar year (approximately 354 days). The logic is that zakat applies to stable, growing wealth — not to assets that briefly touch the threshold and fall back.

For most individual Muslims in Malaysia, the practical convention is to calculate zakat once a year (often during Ramadan) based on assets held at that point, using a consistent reference date each year. The haul condition is considered met if the asset has remained above nisab throughout.

The 2.5% rate

The rate is fixed at 2.5% across all Malaysian states, as confirmed by the National Fatwa Committee (Jawatankuasa Fatwa Kebangsaan). It applies to the zakatable base of each asset type, after that base has been determined according to the rules for each category. There is no progressive structure — the rate does not rise with wealth. This uniformity is one reason zakat calculations are more tractable than income tax calculations.

Zakat pendapatan (income zakat)

Income zakat applies to earned income — salary, professional fees, business income drawn as personal income. Two methods are recognised in Malaysia:

• Gross method: 2.5% of annual gross income, if gross income ≥ nisab. No deductions are applied. This is the method endorsed by the National Fatwa Committee (56th meeting, 2003) and is the simpler of the two to calculate.
• Net method: 2.5% of (annual gross income − permitted deductions). Permitted deductions are estimates that vary by state and by year: personal self allowance, spouse, children, EPF contributions, parents, and Tabung Haji contributions are among the categories recognised. The net method results in a smaller zakatable base and therefore a lower zakat amount.

Gross method

2.5% × annual gross

Net method

2.5% × (gross − deductions)

Rate

2.5%

Threshold

Annual income ≥ nisab

Example (gross method): annual gross salary RM 80,000. Nisab ≈ RM 51,994.50. Since RM 80,000 > nisab, income zakat applies: RM 80,000 × 2.5% = RM 2,000.

Zakat simpanan (savings zakat)

Savings zakat applies to cash and near-cash holdings. The key rule is that zakat is charged on the lowest balance held over the haul — the full lunar year — not on the balance at any particular moment. This prevents the nisab from being gamed by temporarily moving money out before the calculation date.

Asset types covered include cash in bank accounts, ASB (Amanah Saham Bumiputera) holdings, Tabung Haji balances, and shares held as savings instruments. The formula:

Base

Lowest balance over haul

Threshold

Lowest balance ≥ nisab

Rate

2.5%

Zakat

Lowest balance × 2.5%

Example: if your lowest bank balance over the past lunar year was RM 60,000, and the nisab is RM 51,994.50, then savings zakat = RM 60,000 × 2.5% = RM 1,500.

Zakat emas (gold zakat)

Gold zakat has an important distinction between kept or investment gold (simpanan) and worn jewellery (pakaian). The rules differ significantly.

Kept or investment gold: the nisab is 85 grams by weight. If you hold 85g or more of kept gold, zakat applies to the full amount:

Kept gold nisab

85 g by weight

LZS example: kept gold

100 g × RM 144.38 × 2.5%

Zakat (example)

RM 360.95

Note that RM 144.38 per gram is the price used in LZS's published worked example — it is a historic reference price, not the current gold price. The arithmetic is fixed by the example: 100 × 144.38 × 0.025 = RM 360.95.

Worn jewellery: the uruf (customary exemption limit) applies. Jewellery worn for personal use is exempt up to the uruf limit. Only the excess above uruf is subject to zakat. The uruf varies by state:

Selangor uruf

800 g

Many other states

150–200 g

LZS example: worn gold

(900 − 800) g × RM 144.38 × 2.5%

Zakat (example)

RM 360.95

In LZS's example: a person holds 900g of worn jewellery. The Selangor uruf is 800g, so 100g is in excess. Zakat = 100 × 144.38 × 2.5% = RM 360.95. If the same person were in a state where uruf is 150g, the excess would be 750g and the zakat considerably higher — which is why the state authority matters.

Zakat perniagaan (business zakat)

Business zakat applies to the working capital of a Muslim-owned business (sole trader, partnership, Sdn Bhd). The standard method used by Malaysian authorities is the working-capital method:

Step 1

Current assets − current liabilities

Step 2

± adjustments (debts, receivables)

Step 3

× Muslim ownership %

Rate

2.5% if result ≥ nisab

For a fully Muslim-owned business: if current assets are RM 500,000 and current liabilities are RM 300,000, the working capital is RM 200,000. If RM 200,000 ≥ nisab (RM 51,994.50), business zakat = RM 200,000 × 100% × 2.5% = RM 5,000.

Adjustments can include adding back debts owed to the business (good receivables) or deducting non-zakatable assets. The exact adjustment rules vary by state authority; the figures above are illustrative. For complex business structures, consult your state zakat body directly.

Each asset type is nisab-gated independently

An important structural point: each asset type is checked against the nisab separately. You do not aggregate all your assets and then check the total against a single nisab. Income, savings, gold, and business capital are each evaluated on their own, and the zakat amounts from whichever categories clear the nisab are then summed. This matches the way Malaysian state zakat authorities present their online calculators.

The zakat–income tax link: a ringgit-for-ringgit rebate

Malaysia offers a meaningful tax incentive for zakat payment. Zakat paid to an approved zakat authority (a state zakat body) qualifies as a ringgit-for-ringgit rebate against your income tax payable — not merely a deduction from chargeable income, but a direct reduction of the final tax bill.

To illustrate: if your income tax payable (after reliefs and chargeable income calculation) is RM 3,000 and you paid RM 2,000 in zakat to an approved authority, your net tax payable falls to RM 1,000. The rebate cannot make your tax negative — it reduces tax to zero at most.

Common mistakes to avoid

1. Using a stale nisab figure. The nisab moves with gold prices. A nisab published by a state authority six months ago may no longer be accurate. Always verify the current nisab from your state body before deciding whether the obligation applies.
2. Charging zakat on all worn jewellery. Worn jewellery is exempt up to the uruf limit. Many people mistakenly apply the 85g investment-gold nisab to their total jewellery, or forget the uruf exemption entirely. The threshold and the uruf are separate concepts.
3. Mixing kept gold and worn gold. The two categories have different nisab checks and different exemption rules. Kept gold (≥ 85g triggers zakat on all of it); worn gold (only the excess above uruf is charged). They should be calculated separately.
4. Using the wrong gold price for nisab vs. the zakat amount. Both the nisab threshold and the zakat payable on gold should use the same current gold price. Mixing a current price for the zakat calculation with a cached nisab figure from a state website can produce an inconsistency.
5. Forgetting the haul. Assets that have only just exceeded the nisab within the past year may not yet have completed a full haul. This is most relevant for savings that grew significantly during the year.
6. Assuming one state's rules apply universally. The uruf (Selangor 800g vs. most other states 150–200g), the permitted deductions for income zakat, and the published nisab all vary by state. Your state authority is the definitive source.

Zakat and income tax together

For a working Malaysian Muslim, zakat and income tax are closely linked because zakat paid to an approved body is offset directly against tax payable. The practical sequence is:

1. Calculate income zakat (gross or net method) and pay it to your state zakat authority.
2. In your annual tax return (e-Filing), enter the zakat amount paid in the rebate section. LHDN accepts this as a rebate against tax payable, up to the tax amount itself.
3. The net result is that your effective government obligation is income tax minus zakat paid — making zakat a tax-efficient obligation for those who owe both.

For more on how income tax reliefs and rebates interact, see the Income Tax Reliefs Malaysians Miss guide, which walks through the relief and rebate structure for YA 2025 and 2026.

How to use the Zakat Calculator

1. Select which asset types apply to you (income, savings, gold, business). Each type is calculated independently.
2. Enter the current gold price (or use the default) so nisab and any gold zakat are derived from the same price.
3. For income zakat, choose gross or net method and enter your annual gross income (and deductions, if using the net method).
4. For savings, enter the lowest balance held over the past lunar year.
5. For gold, enter kept grams and worn grams separately; the calculator applies the correct nisab and uruf logic for each.
6. The calculator shows zakat per category, the total, and — if your income-tax liability is known — the net-of-rebate tax position.

Calculate your zakat

Enter your details in the Zakat Calculator to see your zakatable base, zakat due per asset type, the total, and the linked income-tax rebate — all in one place, free and in your browser.