Include current accounts, savings accounts, cash at home, and any amounts in digital wallets. If you have money in a foreign account, convert to your chosen currency.
Deduct short-term liabilities (credit card balances, loans due within a year). Do not deduct long-term mortgage debt according to most scholars.
For fasts missed permanently due to illness/age. One meal per missed fast to a person in need.
Set a voluntary charity goal as % of income.
About Zakat β The Third Pillar of Islam
Zakat is the third pillar of Islam β a mandatory act of worship and a purification of wealth. Allah says in the Quran: "Take from their wealth a charity by which you purify them and cause them increase, and invoke [Allah's blessings] upon them. Indeed, your invocations are reassurance for them. And Allah is Hearing and Knowing." (Quran 9:103)
Zakat is due at a rate of 2.5% on all qualifying assets that have been in your possession for a complete lunar year (Hawl) and exceed the Nisab threshold. The Nisab is either 85 grams of gold or 595 grams of silver. Most contemporary scholars recommend using the silver Nisab as it is more inclusive and benefits more people in need.
The eight categories of Zakat recipients are defined in the Quran (9:60): the poor (fuqara), the destitute (masakin), Zakat administrators, those whose hearts need reconciling, freeing of slaves, those in debt, for the cause of Allah, and the stranded traveller. You may give Zakat to reputable Islamic charities that distribute to these categories.