Calculation Methodology & Shariah Sources

Compliance Standards

All our financial calculators adhere to the standards set by the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) and the Islamic Financial Services Board (IFSB). The formulas used are derived from the authoritative Fiqh sources listed below.

Zakat is calculated at 2.5% (1/40) of net wealth exceeding the Nisab threshold. Our calculator uses live gold prices (85 grams of 24K gold) to determine the current Nisab value, following the gold standard which is the most widely accepted method.

Our Faraid calculator implements the Quranic inheritance shares (Fard) as prescribed in Surah An-Nisa (4:11-12, 176). The algorithm follows the classical Sunni methodology of distributing fixed shares first, then distributing the remainder (Asabah) to male heirs. The Awl (proportional reduction) method is applied when shares exceed the estate.

Murabaha is a cost-plus financing contract where the bank purchases an asset and sells it to the client at a disclosed markup. Our calculator computes the total cost including the agreed profit margin. Unlike conventional loans, the profit rate is fixed at inception and does not compound — the total payable amount is determined upfront.

Mudarabah is a profit-sharing partnership where one party provides capital (Rab al-Mal) and the other provides management expertise (Mudarib). Profits are shared according to a pre-agreed ratio, while losses are borne solely by the capital provider (unless due to negligence). Our calculator computes expected returns based on the agreed profit-sharing ratio.

Sukuk are Shariah-compliant investment certificates that represent proportional ownership in an underlying asset. Unlike conventional bonds, Sukuk holders share in the asset's returns rather than receiving interest. Our calculator estimates yields based on the expected profit rate, tenor, and face value.

Important Notice

While we strive for the highest standards of accuracy, the results from these calculators do not replace consultation with a qualified Islamic scholar. We welcome your feedback and corrections via our contact page.