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Zakat on business

Calculate zakat perniagaan (business zakat) from your business's current assets and liabilities using the working-capital method.

Formula

zakat = 2.5% × (current assets − current liabilities), if the net amount ≥ nisab and has been held for one haul

Assumptions

• Uses the working-capital method (net current assets) common among Malaysian state zakat authorities — some scholars use a full-asset method instead.
• Excludes fixed assets used in operations (premises, equipment, vehicles) — only current, working-capital assets are included.
• Applies to sole proprietorships and partnerships directly; company-structured businesses may need to prorate by ownership share.

Frequently asked questions

Are fixed assets like premises or equipment included?
No — the working-capital method only counts current assets (cash, inventory, trade receivables) minus current liabilities. Fixed assets used to run the business, like premises and equipment, are excluded.

How is this different from personal zakat on income?
This assesses the business itself as a separate zakatable entity based on its working capital — it's calculated independently of, and in addition to, any personal income zakat the business owner pays on their own salary or drawings.

What if the business has multiple owners?
Each partner typically pays zakat on their proportional share of the net working capital based on their ownership percentage, rather than the full business amount.

Sources

• PPZ-MAIWP — Zakat pendapatan (income zakat) calculation