Zakat (Arabic: زكاة zakāt, "that which purifies", also Zakat al-mal زكاة ألمال, "zakat on wealth", or "Zakah") is a form of alms-giving treated in Islam as a religious obligation or tax, which, by Quranic ranking, is next after prayer (salat) in importance.
As one of the Five Pillars of Islam, zakat is a religious obligation for all Muslims who meet the necessary criteria of wealth. It is not a charitable contribution, and is considered to be a tax, or obligatory alms.
Zakat is based on income and the value of all of ones possessions. It is customarily 2.5% (or 1/40th) of a Muslims total savings and wealth above a minimum amount known as nisab. The collected amount is paid first to zakat collectors, and then to poor Muslims, to new converts to Islam, to Islamic clergy, and others.
This is the a handy Zakat Calculator app, which lets you calculate your yearly Zakat payables with a few entries of the form.