Zakat on 401k, IRA and pensions

Enter your 401(k), IRA, Roth, pension or ISA and see the zakat under each of the three methods scholars use: on the full vested balance, on what you would get after penalty and tax, or only once you can reach the money.

Zakat due on your retirement accountsEnter an account

Add each 401(k), IRA, pension or ISA with its balance today.

1 Your accounts

Use the balance on your latest statement or app. The unvested part of an employer match is not yet yours, so it is left out under every method.

2 If you took it all out today

Only the "after penalty and tax" method uses these. They are what the IRS or HMRC would take, not zakat rules.

I am 59½ or older (no US early-withdrawal penalty)

Early-withdrawal penalty%10% in the US before 59½. A SIMPLE IRA in its first two years is 25%. Your income tax rate%Federal plus state, or your UK rate. Use the rate the withdrawal would be taxed at.

3 To check the nisab (optional) Your other zakatable wealth, after debts due now$Cash, savings, gold, silver and anything else zakatable that is not entered above. It is added to check the nisab; the zakat shown is only on what you entered above.

Count only the zakatable part of the funds

Zakatable part of the investments%For a long-term pension invested in shares, some scholars (NZF, Islamic Portal) count only the zakatable assets of the companies held. Leave 100% to count the full value. See zakat on stocks for how to find it.

Currency

Nisab based on

Method

Vested balance: 0
Zakatable by this method: 0
With your other wealth: 0

Zakat due, 2.5%0

Method	Zakatable	Zakat
Full vested balance	…	…
After penalty and tax	…	…
Only once accessible	…	…

Gold 24k, per gram: …
Silver, per gram: …
Nisab today: …

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How it works

Three steps, about two minutes

1Add

Enter each account

Balance today, the unvested match for a 401(k), and your own contributions for a Roth.

2Costs

Add penalty and tax

Only the after-tax method uses them: 10% before 59½ in the US, plus your income tax rate.

3Compare

See all three methods

Pick the one your scholar follows. The table shows the other two, so you can see the difference.

Guide

Do you pay zakat on a 401k? Yes, in most views. The question is how much

Most scholars say a 401(k), IRA or similar retirement account is zakatable, because the money in it belongs to you. They differ on how much is zakatable and when it must be paid. There are three main methods: zakat every year on the full vested balance, zakat every year on what you would actually receive if you cashed out today after the early-withdrawal penalty and tax, or no zakat until you can reach the money. Hanafi fatwa bodies mostly take the first, and allow you to pay late as long as you keep a record. Zakat is 2.5% under every method, once your total wealth is at or above the nisab.

The three methods, side by side

Method	What is zakatable	Who holds it
1. Full vested balance	Your contributions, the vested employer match and the growth, every year. You may pay each year, or pay all the past years when you withdraw, if you keep records.	Askimam and Darul Iftaa Chicago (approved by Mufti Ebrahim Desai, citing Fatawa Usmani); Darul Ifta Birmingham for UK pension pots. SeekersGuidance advises paying yearly on the total.¹
2. After penalty and tax	What you would receive today if you cashed out: the balance less the 10% penalty and income tax. Paid every year.	The Fiqh Council of North America, as presented by the Zakat Foundation of America.²
3. Only once you can access it	Nothing while the account is locked or penalised. Then either a fresh start once you have free access, or zakat for all the past years at that point.	The Zakat Foundation of America calls "no zakat on restricted accounts" its strongest opinion. SeekersGuidance says it is not due until full access, then owed for the past years.^{2, 3}

The Hanafi position

Hanafi position

Money you chose to put into a retirement plan stays your property, so it is zakatable every year, together with its growth. Darul Iftaa Chicago, under Mufti Ebrahim Desai, says zakat on a 401(k) is due on your own contributions and on the part of the employer match that has vested, even though penalties and taxes would apply if you withdrew it; you may pay every year, which is easier, or pay for all the past years when you withdraw, if you keep accurate records.¹ Darul Uloom Deoband says the same about money deducted by your own choice, while money deducted compulsorily (as with a provident fund) is not zakatable until you receive it.⁴ On that basis some Hanafi muftis also leave out the employer's share until it is paid. The penalty and tax are not taken off, because they are only charged if you withdraw.

Other madhhabs

Shafi'i and Hanbali: The classical rule for wealth you own but cannot reach yet is that once you get it, zakat is paid for every year that passed. Applied to a 401(k), that means it is zakatable each year, and paying yearly avoids a large bill later. SeekersGuidance (Shaykh Faraz Rabbani), citing Nawawi's Minhaj, takes this line.
Maliki: Wealth you could not reach is paid for one year only, when you receive it.
Contemporary US bodies: The Fiqh Council of North America takes off the penalty and tax first (method 2). The Zakat Foundation of America prefers no zakat while access is restricted (method 3).

A worked example

Bilal is 35. His 401(k) shows $80,000, of which $6,000 is employer match that has not vested yet. His Roth IRA holds $20,000, of which $12,000 is what he paid in. His tax rate is 22% federal plus 5% state, 27%, and he is under 59½, so the penalty is 10%.

Full vested balance: $80,000 less $6,000 is $74,000, plus $20,000 is $94,000. Zakat: $2,350.
After penalty and tax: the 401(k) gives $74,000 × (1 − 0.10 − 0.27) = $46,620. From the Roth, his $12,000 of contributions come out free, and the $8,000 of earnings give $8,000 × 0.63 = $5,040. Total $63,660. Zakat: $1,591.50.
Only once accessible: only his Roth contributions can come out today without a penalty, so $12,000 is zakatable now. Zakat: $300. Under the view that past years are paid on access, he records the other $2,050 for this year.

Each figure assumes his other wealth already puts him above the nisab. Enter the same numbers above to check.

Roth IRA, Roth 401(k) and traditional IRA

A traditional IRA works like a 401(k): before 59½ a withdrawal is taxed and usually carries the 10% penalty. What you paid into a Roth IRA can come out at any time without tax or penalty, so your contributions count in full under every method; only the earnings are taxed and penalised before 59½ (and five years). A 457(b) usually has no 10% penalty once you leave the employer.

Employer match, loans and pensions

Unvested match is not yours yet, so no one counts it. Cash from a 401(k) loan that you still hold counts in your other wealth. A defined benefit (final salary) pension is a promise of future income, not a pot you own, so nothing is due until the payments reach you.⁵

If the investments are shares

Most retirement money sits in funds of shares held long term. The UK's National Zakat Foundation (NZF) and Islamic Portal count only the companies' zakatable assets in a pension, not the full value.⁵ Open "Count only the zakatable part" above to do this, and see zakat on stocks and shares for the figure. Counting the full value is the cautious choice.

UK: ISAs, workplace pensions and SIPPs

Cash ISA: savings, zakatable in full every year. Stocks and shares ISA: the wrapper changes nothing, so the rules for shares apply. Lifetime ISA: an early withdrawal costs 25%, so method 2 counts 75%.
Defined benefit workplace pensions (final salary, career average): not zakatable, according to NZF and Islamic Portal.⁵
Defined contribution workplace pensions (most auto-enrolment schemes): NZF says zakat is due every year on the zakatable assets in the pot. Islamic Portal calls paying the cautious view, and allows delaying it until you can access the fund. Darul Ifta Birmingham (Hanafi) says the pot is zakatable and past years may be paid on receipt, with a record. SeekersGuidance has published the view that an employer-funded scheme is exempt.^{5, 6}
SIPP and personal pensions: a pot you chose to open, zakatable every year on its zakatable assets in NZF's view.⁵ You can draw it from 55 (57 from April 2028), usually 25% tax free and the rest taxed, which method 2 uses once you tick the age box.

When and how to pay

Pick one method, ideally your local scholar's, and use it every year on your zakat date. If you lack the cash, pay from other savings, or keep a record and pay when you withdraw. Add it to the rest of your zakat in the zakat calculator, and give it to people who can receive zakat.

Askimam (Darul Iftaa, under Mufti Ebrahim Desai), "How do I pay Zakat on my 401(k) plan?", answered by Sohail ibn Arif, Darul Iftaa Chicago, citing Fatawa Usmani 2/56; Askimam, Mufti Ebrahim Desai, on the 401(k) plan at 59½; SeekersGuidance, "Should I Pay Zakat on a 401k Retirement Plan?", approved by Shaykh Faraz Rabbani.
Zakat Foundation of America, "Is Zakat Owed on 401(k) Plans and Individual Retirement Accounts (IRA)?", zakat.org, which cites the Fiqh Council of North America for the balance less penalty, fees and tax.
SeekersGuidance, as in note 1.
Darul Uloom Deoband, fatwa 1740/D=247K=1430, on provident fund deductions; Askimam, Mufti Ebrahim Desai, on the employer's portion of a provident fund.
National Zakat Foundation (nzf.org.uk), on defined benefit and defined contribution pensions and personal pension plans; Islamic Portal, "Zakat on Pensions", Yusuf Shabbir, approved by Mufti Shabbir Ahmed and Mufti Muhammad Tahir, March 2025.
Darul Ifta Birmingham, fatwa 08787, citing al-Fatawa al-Hindiyyah; SeekersGuidance, "Is Zakat Due on an Employer-Funded Workplace Pension?" and "How Do I Pay Zakat on a Defined Contribution Scheme?", Shaykh Muhammad Carr. US tax rules: IRS, additional 10% tax on early distributions before 59½.

The rulings on this page are pending review by the scholars on our team.

Questions

Good to know

Do you pay zakat on a 401k?

Most scholars say yes. Hanafi fatwa bodies count the full vested balance every year, the Fiqh Council of North America counts what you would get after penalty and tax, and some say nothing is due until you can access it.

How do I calculate zakat on my 401k?

Take the vested balance (or, under the second method, the balance less the 10% penalty and your income tax), add it to your other zakatable wealth, and if the total is at or above the nisab, pay 2.5% of the retirement amount.

Is zakat due on a Roth IRA?

Yes, in the same views. Your contributions can be withdrawn at any time without tax or penalty, so they count in full under every method. Only the earnings are reduced under the after-tax method before 59½.

Do I pay zakat on the employer match?

Only on the vested part, in the Hanafi fatwa of Darul Iftaa Chicago. Unvested match is not yours yet. Some Hanafi muftis leave out employer money until it is paid, as with a provident fund.

Can I pay zakat on my 401k when I retire instead?

Hanafi fatwas allow it: you may pay all the past years when you withdraw, if you keep an accurate record of each year. Paying yearly is easier and is what most advise.

Is zakat due on an ISA or a UK pension?

A cash ISA is savings, zakatable in full. A stocks and shares ISA follows the rules for shares. Defined benefit pensions are not zakatable; defined contribution pots and SIPPs are, in the view of NZF and Darul Ifta Birmingham.