New to this? Zakat fundamentals covers the background this guide assumes, as part of the course.
Zakat on directly-held shares is a different question from zakat on superannuation. Super is generally not zakatable until it's actually paid out to you, while shares you hold directly (in a brokerage account, outside super) are zakatable annually once you've held them through a full lunar year (hawl), assuming your total zakatable wealth is above the nisab threshold. This guide covers direct share holdings only.
The governing standard is AAOIFI Shariah Standard No. 35 (Zakah), published 2015, the same body behind the AAOIFI screening standard this whole site runs on. It sets out two accepted approaches, and which one applies depends on why you're holding the shares.
Method 1: trading / short-term holdings
If you bought the shares intending to trade or sell for profit in the near term (not as a long-term investment), the shares are treated like trading inventory. Zakat is due on the full current market value of your holding on your zakat due date: 2.5% of market value, full stop. No breakdown of the company's balance sheet required.
Method 2: long-term investment holdings
If you're holding shares as a long-term investment (the way most people hold their ASX portfolio), the classical fiqh position is that you're a part-owner of a business, not holding trading stock. A business owns a mix of things: some zakatable (cash, receivables, inventory), some not (factories, equipment, property, goodwill). Under this view, zakat is only due on your proportional share of the company's zakatable assets, not the full market value of your shareholding.
In practice, this means: (cash + receivables + inventory, per the company's balance sheet) ÷ total shares outstanding × the number of shares you own × 2.5%.
Where our screener actually helps
Every stock marked pass or review on our ASX Screener already shows two of the three components Method 2 needs: cash & securities as a percentage of market cap, and accounts receivable as a percentage of market cap, because those are exactly the ratios AAOIFI's compliance screen also checks. That's not a coincidence; the AAOIFI Shariah-compliance standard (No. 21) and the AAOIFI zakat standard (No. 35) both start from the same idea of separating a company's zakatable, liquid assets from the rest of the business.
To be precise: this gives you a rough, directional starting point, not a complete Method 2 calculation. It's missing the inventory component, and the ratios are percentages of market cap rather than a per-share dollar breakdown. But if a stock shows 25% cash and 12% receivables, that's a meaningfully different zakat position than one showing 2% and 1%, and knowing that before you go digging through an annual report is genuinely useful. Treat it as a first pass, not the final number.
Whichever method you use, the simplest reliable approach for most people: pick one method and apply it consistently, keep a note of your zakat due date each year, and speak to a knowledgeable scholar or use a proper zakat calculator (Islamic Relief Australia and the National Zakat Foundation both publish Australian-context calculators) if your holdings are large enough that getting it wrong matters.