Zakat on Gold: How to Work Out What You Owe

Zakat on gold is one of the most common questions this site receives, and one of the worst served by the internet — usually because the answer skips the arithmetic and stops at "2.5%." The calculation itself is genuinely simple. What makes people hesitate is knowing which gold counts and what the threshold is on the day they are calculating.

A note on what follows: this explains the mechanics and the main positions scholars hold. It is not a fatwa. On the question of worn jewellery in particular, follow the ruling of a scholar you trust.

The three things you need

1. The nisab — the threshold below which no zakat is due.

For gold the nisab is classically 85 grams of pure gold (20 mithqal / 20 dinars). If everything you hold is below that, you owe nothing.

The nisab is a weight, not a currency amount — which is exactly why it holds up across centuries and across currencies. To express it in money on any given day, multiply 85 by the current price of a gram of 24K gold in your currency.

2. The hawl — a full lunar year of possession.

Zakat is due on wealth you have held for one complete lunar year (about 354 days, roughly 11 days shorter than the solar year). Pick a date, note it, and use the same date each year. Many people use a fixed day in Ramadan simply because it is easy to remember.

The nisab must be met at the start and end of the year. Ordinary fluctuation in between does not break it.

3. The rate — 2.5%.

Or, put as the fraction that is easier to check: one fortieth. Divide by 40.

Working it out

The calculation is: total weight of qualifying gold → convert to a value at today's price → multiply by 0.025.

Purity matters, and this is where most home calculations go wrong. Zakat is on the gold content, not the gross weight of the object. A 21K piece is 87.5% gold; a 18K piece is 75%.

Two ways to handle it, both correct:

• Convert to pure weight. 100 g of 21K = 100 × 0.875 = 87.5 g of pure gold. Compare that to the 85 g nisab.
• Value each piece at its own karat price. Multiply each piece's gross weight by the per-gram price for its karat, and add the values.

A worked example. Suppose someone holds:

89.1 g of pure gold is above the 85 g nisab, so zakat is due.

If 24K gold is trading at, say, 250 units of local currency per gram, the zakatable value is 89.1 × 250 = 22,275, and the zakat owed is 22,275 ÷ 40 = 557 units.

Note that the ring alone, or the chain alone, would have been below nisab. You add everything together — and in the majority view, gold and silver and cash and trade goods are combined for the purpose of reaching the threshold.

The question scholars differ on

Does jewellery a woman owns and actually wears count?

This is a genuine, long-standing difference of opinion among the four schools, not a modern controversy:

• One position holds that jewellery in normal, permitted personal use is exempt, being a personal effect rather than stored wealth. This is the view associated with the Maliki, Shafi'i and Hanbali schools.
• The other holds that gold is zakatable whatever form it takes, worn or stored. This is the Hanafi position, and it is also the view of a number of contemporary scholars.

Both positions are held by serious scholarship. What you should not do is pick whichever is convenient each year — follow one consistently, and ask someone qualified in your own context.

Gold held explicitly as savings or investment — coins, bars, pieces bought to store value — is zakatable on every view. There is no disagreement there.

Practical points people get wrong

• Use the price on your zakat date, not what you paid. Zakat is on present value.
• Use the sell-side value — what the gold is actually worth, not a retail replacement price with making charges. You are valuing metal.
• Making charges and stones are not gold. Deduct the weight of stones; a 30 g stone-set piece is not 30 g of gold.
• Debt. Most scholars allow you to deduct immediately-due debts before assessing. Long-term debt such as a mortgage is treated differently, and views vary.
• Write it down. Weight, karat, date, price used, amount paid. Next year's calculation takes five minutes instead of an evening.

Doing it in two minutes

Weigh your pieces, group them by karat, and open the page on this site for your country. It shows the live per-gram price for 24, 22, 21, 18 and 14 karat in your own currency. Multiply, add, divide by 40.

The nisab in your currency, on any given day, is simply the 24K gram price × 85.