Zakat and compounding
Zakat is an annual 2.5% due on wealth held for a lunar year. Because it comes off before the next year compounds, the drag is 2.5% repeated, not 2.5% once. This tool shows the balance after every payment.
Islamic investment & Zakat calculator
Project halal compound growth with your annual 2.5% Zakat taken out at each year end, so the balance you plan against is the one you will actually hold.
Estimates for planning, not financial or religious advice. Check Zakat rulings with a scholar. Terms
Your plan
Lump sum + monthly1–60
Net value after Zakat
Year 10Buys what $70,373 buys today
You put in$70,000
Growth earned+$38,147
Zakat given$13,572
Lost to inflation$24,202
Annual return after Zakat5.14%
Growth over time
YoursZakatBefore ZakatToday's money
Where the money goes
$108,147Your contributions$70,000
64.7%
Growth you keep$24,575
22.7%
Zakat given$13,572
12.5%
Year-by-year schedule
Scroll for all 10 years| Year | Deposited | Growth | Zakat | Zakat to date | Balance | Today's money |
|---|---|---|---|---|---|---|
| 01 | $16,000 | +$1,057 | −$426 | −$426 | $16,631 | $16,146 |
| 02 | $6,000 | +$1,587 | −$605 | −$1,032 | $23,612 | $22,257 |
| 03 | $6,000 | +$2,146 | −$794 | −$1,826 | $30,964 | $28,337 |
| 04 | $6,000 | +$2,734 | −$992 | −$2,818 | $38,706 | $34,390 |
| 05 | $6,000 | +$3,353 | −$1,201 | −$4,020 | $46,858 | $40,420 |
| 06 | $6,000 | +$4,006 | −$1,422 | −$5,441 | $55,442 | $46,432 |
| 07 | $6,000 | +$4,692 | −$1,653 | −$7,095 | $64,481 | $52,429 |
| 08 | $6,000 | +$5,415 | −$1,897 | −$8,992 | $73,999 | $58,415 |
| 09 | $6,000 | +$6,177 | −$2,154 | −$11,147 | $84,021 | $64,395 |
| 10 | $6,000 | +$6,979 | −$2,425 | −$13,572 | $94,575 | $70,373 |
Deposited$70,000Growth+$38,147Zakat−$13,572Balance$94,575
Understanding Islamic investing & Zakat
What counts as halal
Shariah-compliant investing avoids riba (interest), gharar (excessive uncertainty), and revenue from alcohol, gambling, pork and conventional finance. That leaves Islamic funds, sukuk and screened equities.
Reading the projection
The headline is nominal. Beneath it sits the same money in today's purchasing power, which is the figure worth planning a house or a hajj against. At 3% inflation a decade removes roughly a quarter of it.
Nisab and timing
Nisab is the floor at which Zakat falls due: 85g of gold or 595g of silver. Deposits are added at the start of each period and Zakat at the end of each year, matching how most scholars describe the order.
Frequently asked
How is Zakat calculated on an investment portfolio?
Zakat is 2.5% of the market value of your zakatable assets, once you have held them for a lunar year and the total sits above nisab. It applies to the whole holding, principal and gain together, valued at today's price rather than what you paid for it.
Is compound interest halal?
Interest from a conventional savings account or bond is riba, and is not permitted. Compound growth from a Shariah-compliant holding, whether profit-sharing, equity in a screened company, or sukuk, is a different thing and is permitted. This calculator models the second, not the first.
Do I pay Zakat on the whole portfolio or only the profit?
On the whole portfolio. Most scholars hold that shares and funds held for growth rather than active trade are zakatable at 2.5% of current market value. Rulings differ on trading stock, so check yours with a scholar.
What is the nisab threshold for Zakat?
Nisab is the floor at which Zakat becomes due: the value of 85 grams of gold or 595 grams of silver. The silver measure is lower and reaches more recipients, which is why most charities publish it. Check a current figure before you calculate, since it moves with the spot price.
How does inflation affect my halal investments?
Inflation changes what your money buys, not the number on the screen. An 8% return against 3% inflation is closer to 5% in real terms. Switch on the inflation adjustment and the projection adds a second figure under the headline, a column in the schedule and a line on the chart, each showing the same balance in today's money.