Short-term debt: deduct it
Money you owe and must repay within the year — bills, credit-card balances, personal loans, tax due — may be deducted from your zakatable wealth before comparing with nisab. This is the majority view, and the zakat calculator has a debts field for exactly this.
Long-term debt: two views
A mortgage stretches decades ahead, and its treatment divides scholars.
Common contemporary view: deduct only the coming 12 months of payments — the slice that is "due within the year" on each zakat date. Stricter view: deduct nothing, because the debt is long-term, not immediate.
Order of operations
On your zakat date: add up all zakatable assets, subtract the deductible debts as above, compare the remainder with nisab, and pay 2.5% if the hawl has completed.
Only debts you owe are deductible — money owed to you is treated the other way: it is zakatable if you expect to receive it.
A worked example (illustrative numbers)
Savings of $10,000 on the zakat date, a credit-card balance of $2,000 due now, and a mortgage with $14,400 of payments due over the coming 12 months.
Deduct the card: $10,000 − $2,000 = $8,000. Under the coming-12-months view, deduct $14,400 more — which takes the total to zero, so no zakat is due this year. Under the deduct-nothing view for the mortgage, zakat is 2.5% × $8,000 = $200.
Frequently asked questions
Can I deduct my debts from zakat?
Immediate debts due within the year may be deducted from zakatable wealth before the nisab comparison — that is the majority view. Credit-card balances, bills, and personal loans due now all count.
Do I deduct my whole mortgage from my zakatable wealth?
No — under either view. The common contemporary view deducts only the coming 12 months of payments; the stricter view deducts nothing for long-term debt. Say both are options you have heard, then follow your scholar.
Does a student loan reduce my zakat?
Treat it by the same rule: the portion due within the coming year is deductible on the majority view; long-term balances follow the two positions on long-term debt.
What about money owed to me?
The mirror image: money owed to you is zakatable if you expect to receive it; if repayment is doubtful, the majority view is to pay zakat on it when you receive it, for one year.