The zakah base (receptacle) is typically determined by an Islamic bank by applying 2.5% for a lunar calendar year or 2.5775% for a solar calendar year based on the amount of net assets available to the bank. According to the method of net assets, the zakah base (receptacle) can be determined as in the following formula:

Zakah base = zakatable assets – (short-term liabilities + URIA equity + minor interest + other types of equity)

Zakatable assets comprise cash and cash equivalents, receivables for doubtful debts (net of provisions), assets acquired for trading (e.g. inventory, marketable securities, equipment, real estate, etc.), and financing assets net of provisions (such as assets associated with mudaraba, musharaka, salam, istisna’a, etc). The portion of funds expensed to purchase fixed assets relating to financing assets should be deducted.

Zakatable assets that are available for trading should be categorized into different groups before applying zakah rates or nisab. Examples include finished goods, agricultural produce, livestock, etc. Other types of equity may include equity owned by government entities, equity owned by waqf funds, equity owned by charities, equity belonging to non-profit organizations except equity owned by individuals.

For example, in an Islamic bank, if assets subject to zakah are worth $100 million, while liabilities falling due within the current financial year are valued at $40 million, equity of unrestricted investment accounts (URIA) is $20 million, minor interest and other types of equity are $5 million, then:

Zakah base (zakah receptacle) = 100 – (40+ 20 + 5) = $35 million

Zakah amount for the fiscal year = zakah base × 2.5775% = $35 million × 2.5775% = $902,125

This means the Islamic bank would have to pay $902,125 in zakah to those eligible (the needy, the poor, etc.)