Gold Zakat: How to Calculate the Nisab and Method of Easy and Practical Calculation

Starting from the fundamental question: What is the Nisab of Zakat on gold?

Before discussing numbers and calculations, let’s clarify first: The Nisab of gold for Zakat equals 85 grams of pure gold ( 24-karat ). This is the minimum threshold that, if your savings reach it and a full Hijri year passes over it, Allah has mandated that you pay Zakat.

But what if your gold is of a lower karat? Here’s the simple formula:

• 21-karat: Nisab is approximately 97 grams
• 18-karat: Nisab is approximately 113 grams

The reason is simple: the lower the purity (, the more weight you need to reach the same amount of pure gold.

The calculation begins here: How do you calculate your gold Zakat?

The basic formula is only one, and you won’t forget it:

Gold Zakat = 2.5% of the market value of pure gold

Let’s apply it to real cases:

) First practical case: 24-karat gold

You own 100 grams of pure gold ### 24-karat (, and the market price per gram is 400 SAR.

• Pure gold: 100 × 1 = 100 grams
• Total value: 100 × 400 = 40,000 SAR
• Zakat due: 40,000 × 2.5% = 1,000 SAR

) Second practical case: 21-karat gold

You own 100 grams of 21-karat gold, with the current price of 400 SAR per gram.

• Pure gold: 100 × 0.875 = 87.5 grams
• Total value: 87.5 × 400 = 35,000 SAR
• Zakat due: 35,000 × 2.5% = 875 SAR

Third practical case: 18-karat gold

You own 100 grams of 18-karat gold, with a price of 400 SAR per gram.

• Pure gold: 100 × 0.75 = 75 grams
• Total value: 75 × 400 = 30,000 SAR
• Zakat due: 30,000 × 2.5% = 750 SAR

⚠️ Note here: In the last case, the pure gold is only 75 grams, which is less than the Nisab ###85 grams(, so there is no Zakat on this amount.

When does Zakat actually become obligatory?

Having the Nisab alone is not enough. Three conditions must be met:

1. Actual possession of the Nisab: 85 grams of pure gold or its equivalent in lower karats

2. Passing a full Hijri year: If you buy new gold today, Zakat becomes due after 12 Hijri months of ownership. But if you have owned gold for some time, the count starts from the date of your first ownership.

3. Full ownership: The gold must be entirely yours, not mortgaged, borrowed, or pledged.

Types of gold and rulings on Zakat

Not all gold has the same ruling. Here’s the detail:

) Saved and investment gold

If you own gold in the form of bars, coins, or even gold ETFs, the ruling is clear: Zakat is obligatory at 2.5% of its value, with no disagreement among scholars. The reason is that your intention from the start is saving or profit, not consumption.

Jewelry for daily adornment

Here, scholars differ:

• The majority (Malikis, Shafi’is, Hanbalis ): They see that jewelry used daily like rings, bracelets, necklaces has no Zakat, because it is considered like clothing and personal tools.

• Hanafis: They see Zakat is obligatory on all gold, even if used for adornment, because gold is a wealth in itself.

• A third opinion among some scholars: Zakat is paid only once on jewelry.

Practical advice: If you are strict in religion, follow the Hanafi view and pay Zakat on all your gold. If you follow the majority, jewelry for daily adornment is exempt.

Men’s gold

A man is prohibited by Shariah from wearing gold, but if he owns it (for example, to sell or save), then Zakat is due on it just like women.

Gold funds and investments: Are they subject to Zakat?

Answer: Yes, they are, but the method differs:

Gold index funds backed by actual gold ###ETFs(: They are treated as if you own the gold directly. Calculate their market value at the time of the Hawl, and pay 2.5% of it.

Mining and gold company stocks:

• If bought for speculation )quick sale and quick profit(: Zakat is on the full value at 2.5%
• If bought for long-term investment: Zakat is only on profits and cash dividends

Who is obliged to pay Zakat?

Zakat is obligatory on a Muslim who meets simple conditions:

• Adult and sane )Children and the insane are exempt(
• Possesses the Nisab )85 grams or more of pure gold(
• A full Hijri year has passed since owning it

Who deserves Zakat?

Zakat funds are distributed only to specific categories )8 categories mentioned in the Quran(:

1. The poor: Those who do not have enough to meet their basic needs

2. The needy: Those who have some but not enough

3. Zakat collectors: Those appointed to collect and distribute

4. Those whose hearts are to be reconciled: Those given to strengthen faith or gain their affection for Islam

5. To free captives: Helping those in debt to free themselves

6. Those in debt (Gharim): Those burdened by heavy debts

7. In the cause of Allah: Spending on what serves Islam and defending the community

8. The wayfarer: The stranded traveler who has no means to return

) Who does not deserve Zakat?

• Ahl al-Bayt of the Prophet and Banu Hashim (completely exempt from Zakat)
• The wealthy and those able to work but lazy
• Disbelievers ###do not receive Zakat(
• Those whose expenses you are obliged to cover: your parents, wife, children )spend on them from your own wealth(

Common mistakes people make

First mistake: Calculating Zakat based on the weight of gold instead of its market value ❌ Wrong: Paying 2.5 grams of gold instead of 2.5% of its value ✅ Correct: Calculate the market value and pay 2.5% of it in cash or gold

Second mistake: Confusing saved gold with jewelry for daily use ❌ Wrong: Not paying Zakat on bars because you think they are like jewelry ✅ Correct: Bars and gold coins have Zakat without dispute

Third mistake: Not using the current gold price ❌ Wrong: Using an old price from years ago ✅ Correct: Use the market price on the day Zakat is due

Fourth mistake: Delaying paying Zakat ❌ Wrong: Waiting for Ramadan or a specific occasion ✅ Correct: Pay immediately after a full Hijri year passes; delaying is sinful

Fifth mistake: Giving Zakat to wealthy relatives as a favor ❌ Wrong: Giving Zakat to your rich brother, for example ✅ Correct: Only give it to eligible recipients according to their categories

An important point: Gold mixed with other metals

If your gold is mixed with copper or silver, how do you calculate Zakat?

The simple solution: Treat it according to its actual karat. For example:

• 18-karat gold = 75% pure gold
• 21-karat gold = 87.5% pure gold
• 24-karat gold = 100% pure gold

If you have 100 grams of 18-karat gold, the pure gold content is only 75 grams; calculate Zakat on this basis.

The summary you need

Gold Zakat is not as complicated as it seems:

1. Nisab: 85 grams of pure gold )or its equivalent in lower karats(
2. Rate: 2.5% of the market value
3. Condition: Full Hijri year passes
4. Timing: Pay immediately after the Hawl

The important thing to remember: Zakat is not just a financial burden, but an act of worship that purifies yourself and your wealth, and promotes social solidarity among your brothers in need. If you pay it willingly and happily, you perform a great act of worship that pleases Allah and benefits society.