Why wealth, not income
Zakat is not a tithe on your pay slip. It is a duty on accumulated wealth: cash and bank balances are fully zakatable, whatever the source of the money. What matters is the balance on the day your hawl completes.
So a high salary that is spent as fast as it arrives generates little zakat, while modest earnings that accumulate quietly can take you over nisab within a year or two.
One date, one snapshot
You do not track every deposit and withdrawal through the year. On your zakat date, add up everything zakatable — current accounts, savings accounts, e-wallets, cash on hand, plus gold, investments, and other assets — subtract immediate debts due within the year, and compare with nisab.
Many people fix their zakat date in Ramadan for the extra reward; the date of your hawl does not change because of it — see the hawl guide for the detail.
Money parked for a purpose
Saving for hajj, a wedding, or a house deposit does not remove money from the calculation: savings are zakatable whatever they are earmarked for, because they are still wealth in your hand.
If the balance dips below nisab mid-year and returns, scholars differ on whether the year restarts — the hawl guide sets out both views.
A worked example (illustrative numbers)
Yusuf earns $60,000 a year but spends nearly all of it. On his zakat date his accounts hold $10,000, above nisab, and a full lunar year has passed. His salary figure never enters the calculation — only the $10,000 does.
Zakat: 2.5% × $10,000 = $250.
Frequently asked questions
Do I pay zakat on my salary?
Not on the salary itself. Zakat is due on wealth, not income: salary counts only as savings still held on your zakat date. What you earned and spent during the year does not add to the bill.
Are bank balances fully zakatable?
Yes — cash and bank balances are fully zakatable, including current accounts, savings accounts, and e-wallet balances held in your name.
What if my savings dip during the year?
If wealth dips below nisab mid-year and returns, the Hanafi view continues the year when nisab is held at start and end; the Shafi'i view restarts the year. Many people avoid the question by fixing a zakat date and paying on everything held that day.
Is money saved for hajj or a house zakatable?
Yes. Savings are zakatable whatever they are earmarked for — the purpose does not exempt them, because they remain wealth in your hand on your zakat date.