Zakat on Cash & Savings
Calculate 2.5% Zakat on current accounts, savings, fixed deposits, and cash at home. Understand how zakat payment and the tax rebate work in Malaysia.
Key Takeaways
- Cash and bank balances are the most straightforward Zakat assets
- Pay 2.5% on all cash held above nisab for one full lunar year
- Zakat is paid to your state zakat body; official payments qualify for an income tax rebate
- You self-calculate across all assets: bank balances, cash at home, e-wallets, and deposits
- Hibah from Islamic banks is halal; conventional interest is given away entirely, separate from Zakat
What Cash Is Subject to Zakat?
All cash and cash equivalents that you own and have held for a full lunar year (hawl) are subject to Zakat, provided your total wealth exceeds the nisab threshold. This includes:
Cash set aside for specific purposes may have different treatment depending on scholarly opinion. Some scholars exclude cash earmarked for immediate expenses or debts. Always verify with qualified Islamic scholars.
How to Calculate Zakat on Cash
Add up all cash holdings
Sum current accounts, savings, fixed deposits, e-wallets, and physical cash in all currencies.
Convert foreign currencies
Convert dollar, pound, or other foreign holdings to ringgit at the current rate.
Check against nisab
Nisab is the value of 87.48 grams of gold or 612.36 grams of silver. Check today's rates or use our calculator; your total wealth must have stayed above it for a lunar year.
Calculate 2.5%
If above nisab, multiply your total cash by 0.025. Pay through your state zakat body to get an official receipt for the tax rebate.
Quick Zakat Estimate
Enter the total value of your cash & savings to calculate
Zakat Due
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Full detailed calculatorHow Zakat Payment Works in Malaysia
Zakat in Malaysia is administered at state level by the State Islamic Religious Councils and their collection bodies, such as Pusat Pungutan Zakat (PPZ-MAIWP) for the Federal Territories and Lembaga Zakat Selangor. You calculate your own zakat and pay through their counters, portals, or banking channels, or opt into an employer salary deduction scheme that remits monthly. Each state body publishes its own annual nisab value in ringgit.
Paying through an authorised body has a practical benefit: the official receipt qualifies for a rebate against your personal income tax, up to the tax charged for the year. Your own hawl calculation still applies to everything: cash at home, accounts, gold, shares, and business assets.
Timing and the Hawl Requirement
Zakat on cash is only due if your wealth (including cash) has been above the nisab threshold for a full lunar year (hawl, 354 days). If your cash balance fluctuates but remains above nisab throughout, calculate Zakat on the amount at the end of your Zakat year.
Important
If your wealth drops below nisab at any point during the year, the hawl period resets. You must start counting again once your wealth exceeds nisab.
Special Considerations
Conventional interest
Interest earned at a conventional bank is haram. Give it all away, separate from Zakat; it does not count toward your Zakat.
Islamic bank hibah
Hibah and contracted profit from Islamic accounts is halal income. Include it in your balance and pay Zakat on the total like any other cash.
Kutu / rotating savings
Money you have paid into an informal rotating savings group is a receivable; most scholars include amounts you expect to recover.
Joint accounts
Calculate Zakat only on your share of jointly held accounts.
Quick Answer
Zakat on cash and savings is 2.5% of your total liquid assets held for one lunar year, provided the amount exceeds the nisab threshold (the value of 87.48 grams of gold or 612.36 grams of silver). In Malaysia, you self-calculate and pay your state zakat body, such as PPZ-MAIWP or Lembaga Zakat Selangor; official payments qualify for a rebate against your income tax.
Key Takeaways
- 2.5% is the standard Zakat rate on cash holdings
- Nisab is the value of 612.36 grams of silver (or 87.48 grams of gold); check current metal prices
- Includes current accounts, savings, fixed deposits, e-wallets, and physical cash
- Pay through your state zakat body to qualify for the income tax rebate
- Conventional interest is given away entirely as purification, separate from Zakat
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This page is reviewed against HalalWallet editorial standards and source documentation.
Reviewed by: HalalWallet Editorial Team
Last reviewed: 2026-03-06
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Frequently Asked Questions
Does my bank deduct Zakat automatically in Malaysia?
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No. Malaysian banks do not deduct zakat from your accounts. Zakat is self-calculated and paid to your state zakat body (such as PPZ-MAIWP or Lembaga Zakat Selangor) through their counters, online portals, or bank channels, or via an employer salary deduction scheme if you opt in. Payments to authorised bodies come with official receipts you can use for the income tax rebate.
Does paying zakat reduce my income tax?
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Yes. Zakat paid to an authorised state zakat body qualifies for a rebate against your personal income tax, up to the amount of tax charged for the year. Keep the official receipts and claim the rebate in your annual filing. Zakat paid directly to individuals, while religiously valid according to many scholars, does not generate a receipt and so cannot be claimed.
What if my balance changes during the year?
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For self-calculation, Zakat is based on your balance on your Zakat anniversary date. As long as your total wealth stayed above nisab throughout the lunar year, Zakat is due on what you hold on that date.
Do I include current and savings accounts?
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Yes, both count: current accounts, savings accounts, fixed deposits, e-wallet balances like Touch 'n Go eWallet, and physical cash. Add them all to your zakatable total on your Zakat date.
What about foreign currency accounts?
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Convert foreign currency holdings to ringgit at the current exchange rate on your Zakat date, then include them in the total. Zakat is due on them like any other cash.
Is hibah from an Islamic savings account treated like interest?
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No. Hibah or contracted profit from a BNM-licensed Islamic bank is halal income; include it in your wealth and pay Zakat on the total. Interest from a conventional account is different: it should not be kept at all and is given away entirely as purification, separate from Zakat.
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