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What to give back.
Screening decides what you may hold. Purification deals with what that holding incidentally earned. Work it out per company, see the method, and understand why this is not charity and not zakat.
- Nothing stored
- Per-holding
- Method always shown
Her Islamic Finance — herislamicfinance.com
Purification calculation
To purify
By holding
The working
The order these go in
These three are a sequence, not a menu. Purifying before you calculate zakat matters — unpurified income inflates the base, so the other order overstates what you owe.
- May I own this company at all? First, because if the business itself fails the screen nothing further matters. Four respected standards, and they do not always agree. Shariah screening checklist
- Does any of what it earned need giving away? A company can pass the screen and still earn some impermissible income. Your share of that is not yours to keep. Purification calculator you are here
- What do I owe on what I hold? Last, and only after purifying — unpurified income inflates the base, so doing these the other way round overstates your zakat. Zakat calculator
The number you need
Finding the percentage.
Everything above depends on one figure per holding: what share of that company's revenue was earned impermissibly. Here is where it comes from.
Your fund's own Shariah report — start here
If you hold a Shariah-compliant ETF or fund, this is the easiest and best answer. They publish an annual purification figure, usually per unit or as a percentage of distributions, and it is free. It is also the most authoritative number you can get for that holding, because it comes from the people who screened it.
The company's annual report
Free, and it is the primary source everything else is derived from. Find interest and investment income in the income statement, add any revenue from non-compliant activities disclosed in the segment breakdown, and divide by total revenue. More work than an app, but nobody can gate it and you end up understanding the number rather than trusting it.
A screening app — quickest, but usually not free
Musaffa and Zoya both let you check whether a stock is halal in a browser at no cost. The exact impermissible income percentage is another matter: Zoya's own FAQ directs you to their app for it, and Musaffa puts it behind a detailed report. Expect to need a free account at least. Their methodologies also differ slightly, so two apps can give you two figures for the same company.
Once you have the number
- Who can receive it?
- General charitable causes — the poor, community welfare, public benefit. Because the money is being disposed of rather than given, scholars are broadly permissive about the destination, though many prefer it goes to those in need.
- Do I get reward for it?
- No, and that is the point. You give it without intending reward, because you are not being generous with your own wealth — you are returning something that was never rightfully yours. This is agreed across the schools.
- Can it count towards my zakat?
- No. Purification and zakat are two separate obligations with different conditions. Paying one does not discharge the other, and purification money cannot be used to satisfy a zakat liability.
- Should I claim it as a tax deduction?
- Many scholars advise against claiming a tax benefit on money you are disposing of rather than donating, since a rebate would mean personally profiting from impermissible income. Practice varies and local tax rules differ — worth asking someone who knows both.
What is portfolio purification?
Even a Shariah-screened company usually earns a small amount of income impermissibly — interest on its cash reserves, most often. Purification means working out your share of that income and disposing of it, so that what you keep is clean. Screening decides what you may own; purification deals with what that ownership incidentally earns.
Is purification the same as charity?
No, and the difference matters. You give the money away without intending reward, because you are not being generous with your own wealth — you are returning something that was never rightfully yours. Scholars across the schools agree on this framing.
Can purification count towards my zakat?
No. They are two separate obligations with different conditions and potentially different recipients. Paying zakat does not discharge purification, and purification money cannot be used to satisfy zakat. In fact impermissible income is not zakatable at all, since it is not your wealth — so purify first, then calculate zakat on what remains.
Do I purify capital gains, or only dividends?
Scholars genuinely differ. Many hold that purification applies to distributed income only, on the basis that a capital gain reflects the market's valuation of a business rather than a share of its earnings. Others apply the same ratio to realised gains as a matter of caution. The calculator lets you choose.
Where do I find the non-compliant revenue percentage?
Screening apps such as Zoya and Musaffa publish it per stock, which is the quickest route. Otherwise it comes from the company's annual report — interest and investment income, plus any non-compliant revenue in the segment breakdown, divided by total revenue. Shariah-compliant funds often publish a purification figure per unit directly.
What if a holding is more than 5% non-compliant?
Then purification is not really the question. AAOIFI's screen sets 5% of total revenue as the ceiling for impermissible income; above it the company does not pass, and the issue is whether you should be holding it at all rather than how much to purify.
Where these positions come from
- Zoya — How to purify stocks
- Joe Bradford — Purification vs. Zakat
- Fiqh Council of North America — Shariah standards for stocks
- Islamic Finance Guru — Zakat on stocks and shares
This is a method, not a fatwa. It cannot know your circumstances, and scholars differ on more than one point above. For anything unusual, take your figures to a scholar you trust.
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