Can you subtract your loans from your Zakat calculation? A guide to distinguishing between deductible and non-deductible debts.
Updated for 2025
In Islamic jurisprudence, Zakat is paid on 'Net Assets'. This means you calculate your total wealth and subtract any immediate liabilities (debts) that you owe to others. This ensures Zakat is only paid on wealth you truly own and have access to.
Not all debts are treated equally. Scholars differentiate between immediate commercial debts and long-term financing.
Debts due immediately or within the current lunar year. Examples: Personal loans due now, unpaid utility bills, shop rentals due, employee salaries.
Long-term debts not due immediately. Most scholars suggest deducting only the upcoming 12 months of payments, not the total loan amount.
If you have a 20-year home mortgage, you cannot deduct the entire debt, as this would likely reduce your wealth to zero, exempting you from Zakat unfairly.
"The preferred view is to deduct only the amount of installments due for the upcoming lunar year. The remaining principal balance is ignored for Zakat calculation."
Our calculator automatically handles liability deductions based on the values you input.
Go to Zakat CalculatorNo. You should only deduct the amount that is payable within the current year. The long-term portion is not deducted.
If the Mahr is 'Mu'ajjal' (due immediately upon demand), you can deduct it. If it is deferred to a later date (death or divorce), it is not deducted.
Yes. If the house is for trade (business stock), you pay Zakat on the house value but deduct the debt. If it is for rental, you pay Zakat on the rental income, not the house value.