Zakat is an obligation ordained by Allahu ta 'ala every Muslim, Male or Female who becomes the owner of a specific amount of wealth known as the “Nisab”. If one’s wealth is equal or more than this specific amount, Zakat will become obligatory upon him. This Nisab is the equivalent in cash, gold, silver, merchandise, etc of 6.12 grams of silver or 87.48 grams of gold. The current valuation for Nisaab is $3994.00.

Now, when one becomes the owner of (the above mentioned) Nisab for the first time in his/her life, then that (Islamic) date should be kept in mind. Then the following year on the same (Islamic) date, if one is still the owner of Nisab, one will be considered as Sahib al-Nisab and Zakat will be obligatory at the rate of 2.5% on the total Zakatable assets. It makes no difference whether the wealth increases or decreases during the course of the year, neither is it necessary that every part of the wealth remains in one’s possession for the whole year. However, if due to some reason all the wealth is lost, then when one becomes the owner of Nisab once again, that will be the new date and Zakat will be calculated thereupon. (See: Bada’i al-Sana’i, 2/96-98 & al-Lubab fi Sharh al-Kitab, 1/145)

Thus, you should fix a date for the calculation of your Zakat. If you are unsure as to when exactly you became the owner of the equivalent of the above mentioned Nisab for the first time, then make a precautionary estimation, and from now on calculate your Zakat each year on that date. Whatever you own on that date, 2.5% of it will have to be given to the poor and needy as Zakat of your wealth.

However, you may subtract from the total the amount you owe to others, for Zakat is not obligatory on wealth that one owes to others.

Sadaqah al Fitr and its' calculation