Zakat on Business Inventory Calculator

1. Value your stock-in-trade

   At current market/resale value, not purchase cost.

2. Add receivables & business cash

   Money owed to you and cash the business holds.

3. Subtract payables due

   Debts and invoices due for payment now.

4. Check against nisab

   2.5% of the net amount, once above nisab.

This is the difference that changes the number most. Zakat on stock-in-trade is calculated on what the goods are worth on your Zakat date — the price you could sell them for — not the price you paid your supplier.

For a trader working on a healthy margin the two figures are far apart, and using the purchase cost understates the Zakat considerably.

What counts as stock in trade

Goods held for sale are zakatable. The things you use to run the business are not: the shop fittings, the delivery van, the machinery, the computers. A vehicle a dealer holds for resale is stock; the same vehicle used to make deliveries is a tool of the trade.

Receivables and payables both count

Money customers owe you for goods delivered is part of your zakatable wealth, because it is wealth you are entitled to. Debts you owe that are currently due come off. What people often miss is the first half: a business with thin cash but a large receivables book can owe considerably more Zakat than its bank balance suggests.

A debt that is genuinely unlikely to be recovered is treated differently by most scholars from one that is merely unpaid. Being honest about which is which matters more than being optimistic.

Where this stops

It works from the valuation you supply. Slow-moving or damaged stock that cannot realistically fetch its list price should be entered at what it would actually sell for, not at the label.