The fourth rite
Halq or taqsir
مُحَلِّقِينَ رُءُوسَكُمْ وَمُقَصِّرِينَ
al-Fath 48:27
The last act of Umrah is to shave or shorten the hair. It is necessary, and it is how you come out of ihram. The Prophet ﷺ prayed three times for those who shave their heads and then once for those who shorten (Bukhari and Muslim).
How to do it
For brothers
Shaving the whole head (halq) is best, and it is sunnah to face the qiblah and begin from the right side. Shortening (taqsir) is also allowed, by cutting at least a fingertip's length, about an inch, from all the hair. To be safe, cut a little more than that. The least that releases you from ihram is a quarter of the head, but the sunnah is to shave or shorten all of it. If your hair is already shorter than a fingertip's length, shortening will not work and you must shave. If you have no hair, pass the razor over the head.
For sisters
Sisters never shave. Gather the hair together and cut about the length of the top joint of a finger from the ends. A simple way is to gather the hair at the end of a finger, wrap it once around your forefinger and cut. At least a quarter of the hair must be shortened, and it is better to take from all of it. Do this in private, by yourself or with your husband, a mahram or another sister, never at a barber's.
Where and when
Do it after Sa'i and within the boundary of the Haram, which includes all of central Makkah and your hotel. Barbers are found outside the masjid near Marwah. Until it is done you are still in ihram, so take care not to put on scent or ordinary clothes first.
What is now permitted
Once the hair is cut, every restriction of ihram is lifted. Brothers may wear ordinary clothes, you may use perfume, cut your nails and return to normal life. Your Umrah is complete. Thank Allah for it and ask Him to accept it, and keep the state of your heart as you kept the rules of ihram.
Questions about halq and taqsir
Is trimming a few strands of hair enough?
No. In the Hanafi school at least a quarter of the head must be shaved or shortened, and the sunnah is the whole head. Cutting a few strands leaves you still in ihram.
Can brothers use clippers?
Yes. Clippers that take the hair down to the skin count as shaving. If you mean to shorten instead, at least a fingertip's length must come off, so if your hair is already shorter than that you must shave.
Can I cut my own hair?
Yes. Once you have finished Sa'i you may shave or shorten your own hair, and this is done only to come out of ihram. Be careful about cutting someone else's hair while you are still in ihram yourself, as shaving another person's hair in ihram can bring a charity penalty. Ask a scholar if you are unsure.
This guide follows the Hanafi method and is based on Shaykh Mufti Wajid Iqbal's Umrah book, Essential Islam. For your own situation, ask a qualified scholar.
Arabic font: IndoPak Nastaleeq, provided by Quran Foundation.