Zakat on Income and Savings in Malaysia (2026): Nisab and Methods

Zakat on income (zakat pendapatan) and zakat on savings (zakat wang simpanan) are both charged at 2.5% in every Malaysian state once your zakatable amount reaches nisab, the value of 85 grams of gold. For 2026, Pusat Pungutan Zakat-MAIWP in Kuala Lumpur set nisab at RM33,996 using a gold price of RM399.95 per gram, while Lembaga Zakat Selangor displayed a live nisab of RM38,748 on 17 September 2026. The National Fatwa Council ruled in 2003 that income zakat is calculated on gross annual income; Selangor's fatwa allows basic living costs to be deducted first. Every ringgit you pay comes straight off your income tax under section 6A(3) of the Income Tax Act 1967. Start with the zakat hub if you are new to the terms.

Is zakat on salary actually obligatory? What the fatwa bodies ruled

The question gets asked because classical texts list gold, silver, livestock, crops and trade goods, not monthly salaries. Malaysia's national fatwa machinery answered it in three stages, and PPZ-MAIWP publishes all three decisions. The 31st Muzakarah of the National Fatwa Committee on 9 December 1992 decided that Muslims may pay zakat from salary income and that the Inland Revenue should grant a rebate on the amount paid, and that professional income is subject to zakat as a form of business zakat. A special muzakarah on 22 June 1997 went further and ruled that zakat on employment income is obligatory for anyone who qualifies.

The 56th Muzakarah on 7 May 2003 settled the method: the basis for zakat on salary and income is gross annual income, and the rate is 2.5% of that total. State fatwa committees then adopted their own detail. Lembaga Zakat Selangor cites the Selangor fatwa that basic needs (had al-kifayah) are exempt from zakat, which is why the Selangor calculator offers a deduction method alongside the gross method. The Quranic basis both bodies cite is Surah al-Baqarah verse 267, the instruction to spend from the good things you have earned.

What counts as income for zakat

Lembaga Zakat Selangor defines income property (al-mal al-mustafad) as every form of wage, remuneration, payment or yield obtained from work or effort, whether regular or occasional. Its published classification is wider than most people assume.

• Employment income: salary, wages, bonus, overtime claims, gratuity, compensation, pension, gifts and awards from the employer, incentives and gains from employee share option schemes.
• Gifts and grants received in the year that are not fixed property and not obligatory maintenance: hibah, prizes, honoraria, a spouse's pension, charity received, compensation, inheritance and marriage dower (mahar).
• Freelance and professional income: consultancy fees of lawyers, architects and private doctors, contractor project payments, commission and residual income from selling insurance, takaful or unit trusts, royalties from writing or art, and one-off cash such as proceeds of refinancing or selling a fixed asset.
• Al-mustaghallat income: rent from houses, buildings, factories, premises, vehicles or equipment, and sales of produce such as milk, eggs or honey from livestock that is not itself zakatable.

Two of those lines surprise people. Inheritance received during the year is treated by LZS as a gift subject to income zakat, and so is a cash-out refinancing of a property. If your year included either, do not leave it out of the calculator. Dividends from shares and unit trusts are handled separately under zakat on investments.

The 2026 nisab: why Kuala Lumpur and Selangor show different numbers

Nisab is 85 grams of gold for income, savings, business, shares and gold itself, and 595 grams for silver, as PPZ-MAIWP's conditions page states. The ringgit figure depends on how each state body converts that into a price. PPZ-MAIWP fixes one annual figure from an average gold price. LZS shows a live figure on its site that moves with the market, and keeps an archive of the half-yearly rates it used in earlier years. The table records what each body published on 17 September 2026.

Three lessons follow. Nisab has more than doubled since 2017 because gold has, so people who were below the threshold a few years ago may be well above it now. Use the figure from the body you pay to, not a neighbouring state's. And if your income is near the line, the gross-versus-net choice described next can decide whether you owe anything at all. Other states publish their own figures on their own sites; we did not verify them and you should read the number on the day you pay.

Gross method versus deduction method

PPZ-MAIWP's worked example is the simplest version of the national ruling: gross annual income of RM100,000 multiplied by 2.5% gives RM2,500 of zakat, payable if the income meets nisab. Many payers in Kuala Lumpur use exactly that. Under the gross method the only question is whether your total income for the year reaches the state's nisab figure.

Lembaga Zakat Selangor publishes two routes on its calculator page: calculation without deductions and calculation with deductions. The deduction route subtracts basic needs for you and your dependants, which LZS lists as shelter, food and drink, clothing, medical care, education and transport, and then tests the remainder against nisab before applying 2.5%. The calculator itself holds the allowance amounts, which change, so run your figures through zakatselangor.com.my rather than copying numbers from a blog. On a gross salary of RM72,000 the gross method produces RM1,800; the deduction method produces less, and for a large family it can produce nothing.

Which method is correct is a matter of state fatwa, not personal preference. If you pay to a body that permits deductions, you may use them. If you pay to PPZ-MAIWP, follow its gross basis. Paying on the gross amount when you were allowed to deduct is not wrong; it is simply more. Our zakat calculator lets you run both numbers side by side before you log in to your state portal.

Monthly salary deduction and how it meets PCB

Both LZS and PPZ-MAIWP run salary deduction schemes through employers. LZS publishes a monthly deduction table (Jadual Potongan Zakat Pendapatan Bulanan, updated in October 2025) that maps gross monthly salary bands and number of dependants to a monthly zakat amount, so an employer can deduct the right sum without the employee calculating anything. The schedule is a PDF on the LZS site; the bands change when nisab changes, so check the current version rather than an old payslip.

The useful part is how this interacts with monthly tax deduction (PCB). PPZ-MAIWP's zakat and tax page says an employer may remit part or all of an employee's PCB to the zakat body as the employee directs, reducing that month's PCB by the zakat paid. Its two published examples: PCB due RM100 and monthly zakat RM70 leaves PCB of RM30; PCB due RM50 and monthly zakat RM70 leaves no PCB at all. The excess RM20 in the second case is not refunded, which matters for the annual reconciliation described in our guide to the zakat tax rebate.

Zakat on savings: the haul and the end-of-year balance

Savings zakat is a separate obligation from income zakat and runs on a different clock. LZS's published method is that zakat on ordinary savings is calculated on the balance at the end of the haul, one lunar year, with any interest received during the period deducted first. For a fixed deposit, once a full year has passed and the amount exceeds nisab, zakat is 2.5% of the total. If you hold several accounts, the end-of-haul balances of all of them are added together before the nisab test, even if no single account reaches nisab on its own.

Islamic bank accounts, GO+ and e-wallet balances, Tabung Haji balances and money market fund units all count as savings for this purpose. Hibah received on an Islamic savings account is not interest and is not deducted. Tabung Haji and EPF have their own fatwa treatment, which we cover in zakat on EPF and Tabung Haji. Debts due immediately may be deducted from zakatable assets; debts due in a future year, such as the remaining balance of a home financing, may not, according to LZS's page on zakat and debt, which follows the OIC Fiqh Academy position.

One technical point from the LZS FAQ: the haul is a hijri year, but most people track their finances by the Gregorian calendar. If you do, LZS applies a rate of 2.577% instead of 2.5% to compensate for the extra days. On a balance of RM50,000 that is RM1,288.50 rather than RM1,250. Either is accepted; the point is to be consistent from year to year.

Paying both without double counting

A salaried person who pays income zakat monthly and then finds RM60,000 in savings at year end has not been charged twice on the same ringgit in the way they fear. Income zakat was paid on money as it was earned; savings zakat is charged on what remains a year later, which is a new haul on a new balance. Both state calculators recognise the overlap in practice: the LZS calculator includes an adjustment section (tolak pelarasan) where zakat already paid in the year can be entered, and the savings section of the same form asks for your year-end balances across accounts.

The simple discipline is to pick one date a year, usually the day your salary deduction scheme started or the first of Ramadan, pull the closing balances of every account on that date, and settle savings zakat on that total net of any income zakat already paid through salary deduction in the same period. Keep the receipts, because the tax rebate depends on them.

The tax rebate in one paragraph

Subsection 6A(3) of the Income Tax Act 1967 gives a resident individual a rebate for zakat, fitrah and other obligatory Islamic dues paid to a religious authority established under written law, limited to the total income tax charged for the year. LHDN's Public Ruling 3/2023 says the claim must be supported by an official receipt from bodies such as PPZ-MAIWP or a state Islamic council, that spouses assessed separately each claim their own payments, and that any excess over tax charged is neither refunded nor carried forward. It is a rebate, not a relief: RM2,500 of zakat removes RM2,500 of tax, not RM2,500 of taxable income.

Verdict: how a salaried Muslim should handle this

If you earn a salary above the nisab of the state you pay to, enrol in your employer's salary deduction scheme with LZS or PPZ-MAIWP, ask payroll to net the monthly zakat against PCB, and file the annual receipt in the rebate section of your tax return. That settles income zakat with no year-end scramble and no cash-flow cost, because the money was going to LHDN anyway.

If you have savings above nisab across your Islamic bank accounts, e-wallets and funds, choose a fixed date, add the balances, deduct nothing except debts due now, and pay 2.5% (or 2.577% on a Gregorian year) to the same body so that one receipt covers both. If you are near the nisab line, use the Selangor deduction method only if you pay to a body whose fatwa allows it. Facts checked against zakatselangor.com.my, zakat.com.my, hasil.gov.my on 17 September 2026.

Frequently asked questions

What is the nisab for zakat on income in Malaysia in 2026?

It depends on the state body. PPZ-MAIWP, which collects for Kuala Lumpur, Putrajaya and Labuan, set the 2026 nisab at RM33,996, based on 85 grams of gold at RM399.95 per gram. Lembaga Zakat Selangor displayed a live nisab of RM38,748 on 17 September 2026, a figure that moves with the gold price. Other states publish their own numbers on their own portals.

Is zakat on income calculated on gross or net salary?

The National Fatwa Committee's 56th Muzakarah of 7 May 2003 ruled that the basis is gross annual income at 2.5%, and PPZ-MAIWP applies that. Selangor's fatwa allows basic needs (had al-kifayah) for you and your dependants to be deducted first, so LZS offers both a gross and a deduction method on its calculator. Follow the rule of the body you pay to.

Can my employer deduct zakat from my salary instead of PCB?

Yes. Both LZS and PPZ-MAIWP run salary deduction schemes, and PPZ-MAIWP's zakat and tax page says an employer may remit part or all of your PCB to the zakat body, reducing PCB by the monthly zakat. If zakat exceeds PCB for the month, PCB falls to zero; the excess is not refunded but still counts toward your annual rebate claim.

How do I calculate zakat on savings in Malaysia?

Take the balance of every savings account, e-wallet and cash fund at the end of one lunar year, deduct any interest received, and add them together. If the total reaches nisab, pay 2.5% of the whole, or 2.577% if you measured the year on the Gregorian calendar, following Lembaga Zakat Selangor's published method. Debts due immediately can be deducted; future financing instalments cannot.

Do I pay zakat on savings in an Islamic bank account?

Yes. The zakat obligation attaches to the money, not to the type of bank. An Islamic savings account balance is treated exactly like any other savings for nisab and haul. The only difference is that hibah or profit paid by an Islamic bank is lawful income and stays in the zakatable balance, whereas interest from a conventional account is deducted before calculating zakat under LZS's method.

Does zakat paid reduce my income tax?

Yes, fully, up to the tax charged. Subsection 6A(3) of the Income Tax Act 1967 treats zakat, fitrah and other obligatory Islamic dues paid to a lawfully established religious authority as a rebate against income tax for the year. You need the official receipt. Any zakat above your tax charged is not refunded and cannot be carried to the next year, according to LHDN's Public Ruling 3/2023.