Zakat on individuals
In one sentenceThe Zakat a person pays on their own wealth (cash, gold, silver, trade goods and collectible debts) when it reaches the Nisab and a Hawl has passed over it.
Simply put
You add up your zakatable wealth on the day the Hawl completes: cash in the bank and at home, gold and silver, trade goods at their value, and debts you expect to collect.
If the total reaches the Nisab, you pay 2.5% of it. There is no Zakat on your home, your car or furniture you use yourself.
Worked example
On the day the Hawl completes, an individual has 40,000 SAR in cash, trade goods worth 25,000 SAR, and a debt owed by a friend who is expected to repay 15,000 SAR. The total is above the Nisab.
Cash40,000 SAR
Trade goods25,000 SAR
Collectible debt15,000 SAR
Total × 2.5%80,000 × 2.5%
Zakat due2,000 SAR
Formula: Zakat = total zakatable wealth × 2.5%
Don't confuse it with
Zakat payerAn individual's Zakat on private wealth is between them and God, while a business's Zakat is a statutory obligation filed with ZATCA.