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How to calculate Zakat on Shares

What are Shares?
A share is a divided-up unit of the value of a company. If a company is worth $100 million and there are 50 million shares in issue, then each share is worth $2. A company’s shareholder is a partner in ownership of the company in accordance with the amount of shares he owns in the company. Unlike Zakat on Savings which takes the lowest value of savings during the Haul period that has reached the Nisab, Zakat on Shares is based on the market value of the shares at end of the Haul or financial year period because shares fluctuate in value more rapidly.

How to Calculate Zakat on Shares
There are two ways to calculate Zakat on Shares:

One Type of Shares: If the shareholder only owns one type of shares, Zakat on Shares is calculated by taking 2.5% of the market value of the shares when Haul and Nisab are reached.
Multiple Types of Shares: If the shareholder owns more than one type of shares, the calculation and payment of the Zakat on Shares is done at the end of the Financial Year (ie. 31 Dec) by taking 2.5% of the market values of all the shares at the end of the year.

Example for One Type of Shares
Date of purchase of shares X : 11/05/12
Today's date : 02/04/13
Today's Nisab : $5,677
Number of Shares Owned
X Company : 4000 units (Value Per Unit Share on 02/04/13 : $1.50)

Valuation of shares at X Company on date Haul is reached:
=$1.50 x 4000
=$6,000 (above Nisab value)
My Zakat on Shares for Haul period 11/05/13 – 02/04/13 is:
= $6,000 x 2.5%
= $150.00

Example for Multiple Type of Shares
Date of purchase of shares X : 11/05/12
Today's date : 31/12/12
Nisab on 31/12/12 : $6,037

Number of Shares Owned
X Company : 3000 units (Value Per Unit Share on 31/12/12 : $1.30)
Y Company : 1000 units (Value Per Unit Share on 31/12/12 : $12.35)

Valuation of shares at X company at end of financial year: 
=$1.30 x 3000 
= $3,900 
Valuation of shares at Y company at end of financial year: 
= $12.35 x 1000 
= $12,350 
Total valuation of shares at end of financial year: 
= $3,900 + $12,350 
= $16,250 (Above Nisab value) 
My Zakat on Shares on 31/12/12 is:
= $16,250 x 2.5%
= $406.25
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  • Home
  • About Us
    • Our History
    • Mosque Management Board
  • Operational Depts
    • Corporate Services
    • aLIVE Madrasah >
      • Media
      • Lessons Overview
    • Islamic Learning Dept >
      • Dakwah
      • Darul Fiqh
      • Ayman Al Iman
      • Projek Riyadhul Jannah
    • Community Engagement >
      • Social Development >
        • Befrienders
      • Volunteer Management >
        • Muslimah
        • Qaryah
        • Warga Emas
    • Kindergarten >
      • Events
      • For Parents
      • Newsletter
  • Online Payment
  • GIRO FORMS
  • Support Services
    • Usage of Facilities
    • Zakat Payment
    • Free Legal Clinic
  • Media
    • Video
  • Careers
  • Contact Us