Zakat is mandatory charitable giving and one of the five pillars of Islam. Every Muslim whose wealth exceeds a minimum threshold (called nisab) must donate 2.5% of their total savings annually to those in need.
The nisab is calculated based on the value of 87.48 grams of gold or 612.36 grams of silver. If your total savings and investments exceed this amount for a full lunar year, Zakat becomes obligatory. It covers cash, gold, silver, business inventory, and investments.
Zakat is distributed to eight specific categories of recipients mentioned in the Quran, including the poor, the needy, those in debt, and travelers. Islamic banks often provide Zakat calculators and collection services, channeling billions of dollars annually toward poverty reduction.