Zakat on Business: How UK Business Owners Calculate Zakat
How UK Muslim business owners calculate Zakat on their business assets. Covers stock, receivables, cash, and what's exempt.
If you own a business, your business assets may be subject to Zakat. The key distinction is between assets held for trade and assets used in operations.
What Business Assets Are Zakatable?
| Asset | Zakatable? |
|---|---|
| Inventory / stock for sale | Yes — at market value |
| Cash in business accounts | Yes — full amount |
| Accounts receivable (money owed to you) | Yes — if expected to be paid |
| Raw materials for production | Yes — at cost or market value |
| Machinery and equipment | No — operational assets exempt |
| Vehicles used for business | No — tools of trade exempt |
| Office furniture | No — operational assets exempt |
| Business premises (used, not for sale) | No — operational assets exempt |
Calculation Method
Zakatable business assets = Inventory + Cash + Receivables + Raw materials - Business debts due
Then add this to your personal zakatable assets and check against the Nisab.
Example: Retail Business
Khalid runs an online clothing store:
- Stock on hand (retail value): £15,000
- Business bank account: £8,000
- Money owed by customers: £2,000
- Outstanding supplier invoices: -£5,000
Zakatable business assets: £20,000
Plus personal assets (£10,000 savings, £3,000 gold) = £33,000 total
Zakat: £33,000 × 2.5% = £825
Service Businesses
If you run a service business (consulting, IT, cleaning, etc.) with no physical inventory, the zakatable assets are typically just:
- Cash in business accounts
- Invoices owed to you
- Minus business debts due
Limited Companies
If your business is a limited company, there are two approaches:
- Underlying assets method — calculate zakatable assets within the company (as above)
- Share value method — treat your shares in the company like any other shares (see our stocks guide)
Most scholars prefer the underlying assets method for businesses you control.
Calculate your business and personal Zakat →
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