Zakat on Gold: Nisab, Rate and How to Calculate It

Zakat on gold is 2.5% of the value of the gold you own, due once you have held at least the nisab for one lunar year. The nisab for gold is 20 dinars, commonly given as 87.48 grams.

That is the whole rule for coins, bars and gold kept as savings. The part people disagree on is jewelry that is worn, and the schools of Islamic law answer it differently. This guide covers the threshold, the calculation and that difference of opinion.

What is the nisab for Zakat on gold?

The nisab is the minimum amount that makes Zakat due. For gold it comes from a hadith narrated by Ali ibn Abi Talib in Sunan Abi Dawud, in which the Prophet Muhammad, peace be upon him, said that nothing is due on gold until it reaches twenty dinars, and that when someone holds twenty dinars for a year, half a dinar is payable. Half a dinar out of twenty is one fortieth, which is where the 2.5% rate comes from.

Converting twenty dinars into grams depends on the weight assigned to the classical dinar, so you will see two figures. The one quoted most often, and the one used on our Zakat page, is 87.48 grams. Some scholars work it out as 85 grams of pure gold. The gap is small, and if your gold is close to the line, giving on it is the cautious choice.

The same hadith sets the silver nisab at 200 dirhams, commonly given as 612.36 grams (or 595 grams on the second calculation).

How to calculate Zakat on gold

You need three things: the weight of your gold, its purity and today's gold price.

A worked example, using a made-up price to show the arithmetic only: you own 120 grams of 22-karat gold. The pure gold content is 120 x 22/24 = 110 grams, which is above 87.48 grams. If pure gold were selling at 100 units of your currency per gram, the gold would be worth 11,000 and the Zakat would be 11,000 x 0.025 = 275.

We have not quoted a nisab in dollars here on purpose. Gold prices move every day, and a figure printed in an article is out of date within hours. Look up the price per gram on the day your Zakat falls due, work out what your gold is worth, and enter that value in the calculator on our Zakat page along with your other savings.

• Weigh the gold in grams. If a piece has stones set in it, a jeweler can tell you the weight of the gold alone.
• Convert to pure gold. Karat is a fraction of 24, so 24-karat is pure, 22-karat is about 91.7% gold, 18-karat is 75% and 14-karat is about 58.3%. Multiply the weight by that fraction.
• Check the total against the nisab of 87.48 grams.
• If you are at or above the nisab and have been for a lunar year, find the value of the gold at today's price per gram and multiply by 0.025.
• Pay in money, which is what most people do, or in gold of the same value.

Is there Zakat on gold jewelry you wear?

This is the question with a real difference of opinion, and both views are held by major schools.

In the Hanafi school, Zakat is due on all gold and silver that reaches the nisab, whether it is stored, saved or worn every day. Scholars who hold this view point to hadiths in which the Prophet asked women wearing gold bracelets whether they paid Zakat on them.

In the Maliki, Shafi'i and Hanbali schools, the majority position is that permissible jewelry kept for personal use is not subject to Zakat, because it is treated like clothing and other personal belongings and not as stored wealth. A published Shafi'i answer from SeekersGuidance puts it this way: there is no Zakat on lawful jewelry intended for personal use, even if its weight exceeds the nisab.

All schools agree on the cases around the edges. Zakat is due on gold held as savings or investment, on coins and bars, and on jewelry held for trade. We are not issuing a ruling here. Follow the school you normally follow, or ask a scholar or your mosque. Some people who are unsure pay it anyway, to be on the safe side.

Gold together with cash and silver

Gold is rarely the only thing a household owns. Zakat is worked out on your qualifying wealth as a whole: cash, bank balances, gold and silver, investments and business stock, less debts that are due now.

This matters for the threshold. Someone with 40 grams of gold and several thousand dollars in savings is below the gold nisab on the gold alone, but their combined wealth may well be above the nisab in money terms, particularly if they use the lower silver nisab that many scholars recommend for mixed savings. The schools differ on exactly how gold, silver and cash are added together, so check with a scholar if your total is near the line.

For the wider rules, including the lunar year, who has to pay and who can receive Zakat, see What is Zakat?.

Common mistakes when paying Zakat on gold

A few errors come up again and again:

• Using the price you paid. Zakat is based on what the gold is worth on your Zakat date, not what it cost.
• Counting the full weight of 18-karat or 14-karat pieces as if they were pure gold, or including the weight of gemstones.
• Forgetting gold that is out of sight: coins in a safe, gifts from a wedding, a bar bought as an investment or gold held in an account.
• Paying only on the amount above the nisab. Once you reach the nisab, the 2.5% applies to the whole amount, not just the excess.
• Skipping years. If Zakat was due in past years and was not paid, ask a scholar how to make it up.

Where Zakat on your gold can go

Gold is the form of savings that many families hold on to through hard years, and Zakat is the share of it that belongs to people who have nothing to fall back on. The Quran lists eight groups who may receive Zakat, beginning with the poor and the needy.

Families in Gaza who have lost homes and incomes are among those many Muslims choose to give to. Fight for Palestine funds food, clean water, medical aid and shelter there through local partner teams. Read Can you give Zakat to Palestine? for how the categories apply, and our Zakat page for how Zakat is handled. When you are ready, you can give on the donate page.