Zakat is a fundamental pillar of Islam and refers to the obligatory contribution that every Muslim must pay from their wealth if they meet the minimum threshold (Nisab). It is a form of charity and serves as a way to purify one's wealth while helping those in need.

The word 'Zakat' comes from the Arabic root meaning 'to purify' or 'to grow'. By giving Zakat, Muslims purify their wealth and help foster economic equality in society. It is typically calculated as 2.5% of one's total savings and qualifying assets that have been held for a full lunar year.

Zakat is different from Sadaqah (voluntary charity) as it is an obligatory act of worship. The funds collected through Zakat are distributed to eight categories of recipients as defined in the Quran, including the poor, the needy, and those in debt.

Nisab is the minimum amount of wealth a Muslim must possess before they become eligible to pay Zakat. It is a threshold that determines whether a person's wealth has reached the level that requires Zakat payment.

The Nisab is traditionally calculated based on the value of 87.48 grams of gold or 612.36 grams of silver. In practical terms, if your total qualifying wealth (cash, savings, gold, silver, business assets, etc.) equals or exceeds the Nisab threshold for a full lunar year, you are required to pay Zakat.

Many scholars recommend using the silver standard for calculating Nisab, as it results in a lower threshold and ensures more wealth is distributed to those in need. The current Nisab values fluctuate with market prices of gold and silver.