Zakat: the base, the rate and the return
Zakat is not a percentage of profit but of a base built from long-term sources of funding less the non-zakatable assets they funded. That distinction is the first thing a beginner gets wrong.
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Zakat is not a percentage of profit but of a base built from long-term sources of funding less the non-zakatable assets they funded. That distinction is the first thing a beginner gets wrong.
The decision it supports
Start with “How the base is built”, then use the explanation to choose the next treatment or check.
What you receive
Work note: Zakat: the base, the rate and the return
A structured explanation, every official rate with source and review date, then a direct path to a lesson, tool or track.
An example you can inspect
Apply the decision: How the base is built
The base starts from equity and long-term liabilities — what funded the business and stayed in it — then deducts net fixed assets and long-term investments, because those are funds settled into assets that are not zakatable.
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How the base is built
The base starts from equity and long-term liabilities — what funded the business and stayed in it — then deducts net fixed assets and long-term investments, because those are funds settled into assets that are not zakatable.
The result is then compared with adjusted net profit, since the base cannot fall below profit. The detail of what is added and deducted is governed by the zakat regulations, and those are what you go back to — not summaries of them.
The effect of a Gregorian year
Zakat is built on the Hijri year. If your financial year is Gregorian, the rate is adjusted by the ratio of your year's days to the Hijri year's — which means applying the base rate unadjusted to a Gregorian year understates the zakat due.
That adjustment is not an accounting judgement but a provision of the zakat collection regulations, so it is computed from the actual days rather than rounded.
The regulatory figures in this article
Zakat rate on the base — 2.5%
Zakat shall be levied at (2.5%) of Zakat Base for Hijri year.
https://zatca.gov.sa/en/RulesRegulations/Documents/ZAKAT%20COLLECTION.pdf
2.5% is for a Hijri year. Where the fiscal year differs, the rate is prorated by days: (2.5% ÷ days in the Hijri year) × days in the fiscal year — Article (15) paragraph 2. A Gregorian year therefore yields more than 2.5%, and applying a flat 2.5% to an entity on a Gregorian year is wrong.