Since 2001 there have been two significant changes that impact how poverty is calculated for Zakat purposes. The first change was in 2007 when the World Bank introduced new international poverty lines for 2005 based on purchasing power parity (PPP). The second change was in January 2011 when the Organization of Islamic Countries recommended setting a standard Zakat PPP line for all member states at $1.25 per day instead of national lines, which are currently between $0.97 and $2.40 per day, according to figures from last year’s Muslim charity forum held by the foundation.

The new Zakat calculator follows the methodology set out by OIC and World Bank to calculate a global poverty line for zakat purposes, which is updated every year. It includes a range of expenditure items, such as food, clothing, and shelter, updated to reflect spending patterns in Saudi Arabia – the only Gulf country part of the World Bank’s PPP group. People will also be able to use it as a general guide on how much they should give from their wealth if they choose not to pay 2.5%, said Alissa Grainger, Head of Philanthropy at the foundation.

A zakat calculator has been developed by the Zakat Foundation of America to help Muslims calculate their Zakatable assets. It is estimated that there are 20 million Muslims in the United States, and together, they contribute $20 million annually for charity. Still, this amount can increase if more people learn how to calculate their Zakat. To determine which assets are taxable, Muslims must first calculate how much money they have made from different sources during the year. This includes income from a job or self-employment, pensions, and interest on savings and investments.

Muslims must also consider items of wealth that could be sold for cash throughout the year, including jewelry, cars, homes, and businesses. A spokesperson for the foundation said, “The purpose of this site is two-fold: firstly to raise awareness amongst American Muslims about their duty to pay Zakat, and secondly to make it as easy as possible for them to find out how much they should be paying.”

24/7 Wall St reviewed 2010 data from the Association of Religion Data Archives on estimated Muslim populations in each state. The review found that New Jersey, New York, and Maryland have the highest number of Muslims. The foundation estimates about eight million Muslims in America, which is 2% of the total US population. The spokesperson added, “We are working to encourage American Muslims to donate their Zakat each year, as this will bring immense benefits for everyone.” It considers all forms of wealth held by an individual, not just cash savings or property ownership since many low-income families now receive dividends from mutual funds or stocks. 

The Zakat Foundation of America is a nonprofit devoted to researching, developing, and distributing Islamic financial products, including zakat calculators. Its sister organization, ZF Knowledge & Information Services, set up the website for this service in 2008 which calculates an individual’s or family’s Zakatable assets and offers guidelines on how much should be donated based on several factors such as current wealth and family size. Muslims can use it to determine what percentage they need to give to charity each year — 2.5% if they follow the “Zakat” tradition, but many choose to pay more to get closer to God.

Every good deed you do will be rewarded ten times it’s like (goodness) both for your good deeds and the good deeds of your parents, forefathers, relatives, wife, children. If you mix goodness with badness, it will be recorded as a complete package of excellence. A person who plants a tree or sows seeds is rewarded ten times the harvest of its fruit for preserving them against animals, erosion by wind or water-reducing wastage due to spoilage by insects, etc. So Zakat on wealth performed on these lines will yield ten returns in terms of social benefits. Muslims are supposed to pay 2.5% on their annual savings and possessions, including money in the bank, gold and silver bars, investments in businesses, and securities. Still, many prefer to give more during Ramadan. It is regarded as one way.