Zakat on Gold — Nisab, Thresholds and How the Calculation Actually Works

Zakat on gold is arithmetically simple and constantly mis-stated, for one reason: the threshold is defined as a weight of metal, but the amount you actually compare against is a sum of money. Since the gold price moves daily, so does the cash threshold.

Any article, poster or app that gives you a fixed nisab figure in rupees or dirhams was accurate on the day it was written and drifts from that day onward.

What nisab is

Nisab is the minimum amount of wealth a person must hold before zakat becomes due. Classical scholarship fixes it against two metals:

• Gold nisab: 87.48 grams — that is 20 mithqal, or 7.5 tola
• Silver nisab: 612.36 grams — 200 dirhams, or 52.5 tola

Both are weights. To find the money threshold today, multiply the weight by today's price per gram of that metal in your currency.

The two thresholds do not agree

Historically the two were roughly equivalent in value. They no longer are — silver has fallen a great deal relative to gold over the past century, so the silver nisab is now far lower in money terms than the gold one.

That difference is not a rounding problem; it changes who owes zakat. Someone whose wealth sits between the two thresholds is above nisab by the silver standard and below it by the gold standard.

Scholarly opinion on which applies is genuinely divided:

• Many contemporary scholars favour the silver nisab, on the grounds that a lower threshold benefits more recipients and better reflects the original intent
• Others favour the gold nisab, as a more stable long-term measure of moderate wealth
• Some hold that the appropriate standard depends on which metal your other assets most resemble

This is a question for a scholar you trust, not for a calculator. Our zakat calculator shows both thresholds live rather than choosing one on your behalf.

The calculation

Three conditions must be met before zakat is due:

1. Your zakatable wealth exceeds nisab 2. It has been held for one lunar year (a hawl — about 354 days, not 365) 3. It is wealth you own outright and can dispose of

If all three hold, zakat is 2.5% of the total.

What counts

• Gold and silver, in any form — jewellery, coins, bars
• Cash, savings and current accounts
• Money owed to you that you reasonably expect to recover
• Business inventory held for sale
• Investments held for trading

What is generally excluded

• Your home and personal effects
• A vehicle in personal use
• Tools and equipment used to earn a living
• Debts you owe that are currently due

Worked example

Suppose you hold 5 tola of 22K gold, and gold is at 480,000 per tola for 24K in your currency.

• 22K is 91.67% pure, so the 22K rate is about 440,000 per tola
• Your gold is worth roughly 5 × 440,000 = 2,200,000
• Add cash and savings, subtract debts due, to get your zakatable total
• If that total exceeds nisab and you have held it a lunar year, zakat is 2.5% of it

The calculator does this for any weight, karat and currency, and tells you which side of each nisab you fall on.

Points people commonly get wrong

Jewellery you wear. Whether worn jewellery is zakatable is a longstanding difference of opinion. The Hanafi position generally holds that it is; several other schools exempt jewellery in genuine personal use. Follow the position you follow in other matters, and if unsure, ask.

Karat. Zakat is due on the gold content, not the gross weight. A 10-gram 18K piece contains 7.5 grams of gold, and that is what is valued.

Which price to use. The standard practice is the price you could actually sell at today — the market value of the metal, not what you originally paid and not the retail price with making charges included. The making charge is not gold and is not zakatable.

The lunar year. A hawl is roughly 354 days, so a zakat anniversary moves about eleven days earlier each Gregorian year. Fixing it to a Gregorian date means paying slightly late over time.

Quick reference