Shares and investment funds can contain zakatable wealth. Trading holdings are generally assessed at their market value. For long-term investments, an underlying-assets method assesses your share of eligible company assets; some people use a supported proxy or full market value. The correct approach depends on intention, holdings and scholarly guidance.
Separate trading from long-term ownership
Record why you hold each investment and the valuation on your Zakat date. Shares bought for trading or resale are treated differently in many published approaches from shares held to earn dividends over time. A fund label such as “growth” does not by itself establish your intention.
Include uninvested account cash where appropriate. Use the actual quantity of units owned and a consistent valuation date, particularly where overseas exchanges close at different times.
Underlying assets and proxies
The underlying-assets approach considers your share of a company’s eligible cash, stock and receivables after relevant liabilities, rather than treating all its buildings and equipment as zakatable. Look for a reliable fund Zakat statement or published assessment.
Our calculator offers full market value and a clearly labelled 25% equity proxy. A proxy is an estimate, not a guarantee that 25% of every company or fund is eligible. Cash funds, property funds and mixed portfolios can have very different compositions. Use the known eligible amount where you have better information.
A comparison using the same investment
With £12,000 of investments, the full-value approach counts £12,000. A 25% proxy counts £3,000. Assuming total assets meet nisab and hawl, the attributable Zakat would be £300 or £75 respectively.
These are alternative calculations, not two charges to add together. Decide on the supported method before entering a value, and keep its source with your annual record.
ISAs and investment accounts
An ISA is a UK tax wrapper. It does not automatically exempt the holdings from Zakat. Put cash ISA balances in cash or the dedicated ISA field once. Put stocks-and-shares ISA holdings through the same investment method you apply to equivalent holdings outside an ISA.
If the eligible value is already included under long-term shares, do not enter the account’s full balance again under ISA. Check for duplicated cash balances and dividends between broker statements and your bank account.
Dividends, losses and unusable holdings
Dividends retained as cash belong in the cash assessment unless already included in the account value. Market losses change the value of holdings; use the valuation date rather than the original purchase price. Suspended shares, inaccessible accounts and disputed ownership may require individual advice.
Purification of impermissible income is a separate question from Zakat. The calculator does not certify an investment as Sharia compliant.
Common questions
Is the 25% proxy a reduced Zakat rate?
Are stocks-and-shares ISAs exempt?
Sources & calculation method
Sources checked on 8 September 2026. External organisations publish their own guidance; a citation does not imply their endorsement of this website.
- National Zakat Foundation: understanding and calculating Zakat
- National Zakat Foundation: pension types and asset proportions
This is educational guidance. We identify differences where relevant and do not claim a named scholarly review. For a personal ruling, consult a qualified scholar familiar with your circumstances. Our editorial policy.