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# Khums Calculator Online

The complex world of financial management often requires the aid of tools and calculators. One such valuable tool, particularly within Islamic finance, is the Khums Calculator.

## Definition

The Khums Calculator is an online tool to calculate the annual religious obligatory tax, known as Khums, within Shia Islam. This tax is traditionally set at 20% of a person’s annual surplus income.

## How Calculator Works

The calculator simplifies the process of determining Khums. It requires two key inputs: your total annual income and expenses. Subtracting expenses from income yields a surplus. The calculator then applies the Khums rate of 20% to this surplus.

## The Khums Calculation Formula

The Calculator uses the following formula:

Khums = (Income – Expenses) * 0.2.

Here, ‘Income’ represents the total earned income in a specific period, and ‘Expenses’ represents necessary expenditures such as rent, food, and healthcare. The resulting figure is surplus which is multiplied by 0.2 to get the Khums amount.

## An Example of Khums Calculation

Consider an individual with an annual income of \$50,000 and expenses of \$30,000. The surplus income is \$20,000 (\$50,000 – \$30,000). Applying the Khums rate of 20% to this surplus yields \$4,000, which is the Khums due for the year.

## Applications

### Personal Finance Planning

The Khums Calculator aids in planning personal finances by providing an accurate estimate of religious obligations.

### Tax Compliance

For adherents of Shia Islam, the calculator ensures accurate Khums compliance.

What is Khums?

Khums is a religious obligation in Shia Islam where one pays 20% of their surplus annual income as tax.

How is surplus income calculated?

Surplus income is calculated by subtracting the total annual expenses from the total annual income.

What percentage is used for Khums calculation?

Khums is calculated at 20% of the surplus annual income.

## Conclusion

Understanding financial obligations like Khums is crucial for effective personal financial planning and religious compliance. A Khums Calculator simplifies this process, providing an easy, accurate tool for the Shia community.