Zakat on Gold: Why Karat Decides the Answer

Before Anything Else

This is a guide to the calculation, written by the person who builds the calculators on this site. It is not a fatwa and I am not a scholar. Where the schools of law differ I have said so and named the positions rather than picking one, because the difference is real and it changes the answer. For a ruling on your own circumstances, ask a qualified scholar or your local zakat body. What I can help with is the arithmetic, which is where most of the mistakes actually happen.

The Step That Decides Whether You Owe Anything At All

The threshold for gold — the nisab — is commonly given as 87.48 grams. What is less often spelled out is that this is a weight of pure gold. Jewellery is alloyed, and the alloy is not gold, so it does not count towards the threshold. The scholarly treatments are consistent on this: the impurity is disregarded and zakat attaches to the gold content.

The practical consequence is that the weight you need on the scale rises as the purity falls, and it rises by more than most people expect. Working backwards from 87.48 grams of pure gold, here is what each common purity has to weigh before it reaches the threshold.

The familiar figure of seven and a half tola is the 24K line. At 22K, the purity most South Asian jewellery is made in, the threshold is nearer eight and a fifth tola. Someone holding eight tola of 22K who has been told the threshold is seven and a half tola will conclude they owe zakat when, on the gold content, they do not yet.

Here is that trap with numbers. Three pieces: a 45 gram 22K necklace, 34 grams of 22K bangles, and a 13 gram 18K ring. The scale reads 92 grams, comfortably past 87.48, and the obvious conclusion is that zakat is due on the gold. But the gold content is 41.22 plus 31.14 plus 9.75, which is 82.11 grams — below the threshold. Change one bangle and the answer flips, which is exactly why the step is worth doing properly rather than approximating.

None of this means the holder owes nothing. Gold is almost never assessed alone, and once cash and other assets join the sum the picture usually changes — which is the subject of two sections further down. The point here is narrower: the gold figure that enters that sum is the pure content, not the scale reading. Our gold calculator does this conversion for you and reports the pure weight alongside the value, in grams or tola.

Two Nisab Figures Are in Circulation, and Both Have a Basis

Search for the gold threshold and you will find 87.48 grams in some places and 85 grams in others, usually with no explanation of why they differ. It is not an error in either. Both are modern conversions of the same classical quantity, and the gap comes from the conversion rather than from the ruling.

The classical threshold for gold is twenty mithqal, and for silver two hundred dirhams. The mithqal is a historical unit of mass, and scholars have put its modern equivalent at slightly different figures. Take the mithqal as 4.374 grams and twenty of them come to 87.48. Take it as 4.25 grams and you get 85. The same choice produces the two silver figures, since the dirham is conventionally seven tenths of a mithqal: 3.0618 grams gives 612.36 for two hundred, and 2.975 gives 595.

Both rows are internally consistent, which is a useful check that neither is a rounding accident: in each case the silver figure is exactly seven times the gold figure, because two hundred dirhams at seven tenths of a mithqal each is exactly a hundred and forty mithqal, or seven times twenty. The two traditions disagree about the size of the unit, not about the relationship between the metals.

For most people the difference is immaterial — a little under three per cent. It only bites if you are sitting between the two, and there the cautious choice is the smaller figure, since it makes the obligation attach sooner.

Why the Gold and Silver Thresholds Drifted So Far Apart

The two thresholds were meant to be alternatives, and the standard guidance is that gold-only holdings are measured against the gold threshold while mixed holdings of gold, cash and other assets are measured against silver. What often goes unsaid is why that choice matters so much today, and the reason is a piece of monetary history rather than a point of law.

As we just saw, the silver threshold weighs exactly seven times the gold one. At the time the thresholds were set, silver was worth roughly a seventh of gold by weight, so seven times the weight of the cheaper metal came to about the same value. The two were, in practice, the same threshold expressed twice.

That relationship has not held. Gold has appreciated against silver over the centuries, and the market ratio in recent years has sat nearer seventy to one than seven to one. The thresholds did not move, but the metals underneath them did — so the silver threshold is now worth a small fraction of the gold one, and choosing between them is no longer a formality. It is the difference between owing zakat on modest savings and not reaching the threshold at all.

This is the strongest practical argument for the silver threshold, and the reason many scholars and zakat bodies favour it: it keeps the obligation roughly where it was originally pitched, and it directs more towards those entitled to receive. Note that the ratio moves with the market, so the gap between the two thresholds is not a fixed quantity — it is worth checking the current metal prices rather than carrying a remembered figure from a previous year.

Jewellery You Actually Wear Is Where the Schools Diverge

Everything above concerns measurement. This section concerns a question of law on which the schools genuinely differ, and it is the one most likely to change what you pay.

The Hanafi position treats gold and silver as monetary metals in themselves. Zakat is due on them whether they sit in a vault, are traded, or are worn daily as jewellery. The use to which they are put does not change their nature.

The Maliki, Shafi’i and Hanbali positions exempt jewellery kept for ordinary personal adornment. The exemption is not unlimited: the pieces have to be genuinely worn rather than stored, held in a customary quantity rather than accumulated, and not held with an eye to investment. Jewellery bought as a store of value and kept in a safe is treated as stored wealth by these schools too, and is zakatable.

The practical upshot is that two households with identical jewellery can owe different amounts and both be correct, because they follow different schools. Follow the position of the school you follow. Where your case is ambiguous — jewellery that is partly worn and partly kept, or bought with mixed intentions — the advice offered across all of them is to lean towards paying, since the cost of paying zakat that was not strictly owed is treated very differently from the cost of withholding zakat that was.

Your Zakat Year Starts When You Crossed, Not When Ramadan Does

Zakat is not an annual tax collected on a fixed national date. It attaches to wealth that has been held above the threshold for a full lunar year, and the year runs from the day your zakatable wealth first rose above the threshold and stayed there. That date becomes your anniversary, and it recurs on the lunar calendar, which means it arrives about eleven days earlier each solar year.

A great many people pay during Ramadan, and there is nothing wrong with that — the reward is greater and the habit is easier to keep. But it is worth being clear that this is a choice about timing, not the source of the obligation. If your anniversary falls in, say, Shawwal and you pay in the preceding Ramadan, you have paid in advance, which is permitted. You have not moved your anniversary.

There is a second question here on which the schools differ again: what happens if your wealth dips below the threshold partway through the year. The Hanafi position looks only at the two ends of the lunar year, so a dip in the middle does not interrupt the count. The other three schools treat falling below the threshold as ending that year, so the clock restarts when you next rise above it. If your savings move around the line — as they do for most people who are near it — this is worth settling before you fix your date, because the two rules can produce different years. Counting the days between two dates on the lunar calendar is fiddly; a days between dates calculator is a blunt but useful check that a full lunar year of roughly 354 days has actually elapsed.

Debts Reduce the Base, but a Whole Mortgage Does Not

Zakat is assessed on net zakatable wealth, so liabilities come off. The common error is to subtract the entire outstanding balance of a long-term debt, which for anyone with a mortgage or a student loan wipes out the base completely and produces a zakat bill of nothing for the rest of their life. That is not the reading contemporary scholarship gives.

The distinction generally drawn is between what is actually due and what is merely owed. A bill that has landed, an overdraft, a credit card balance, rent or wages you are behind on — these are due, and they come off. A mortgage cannot be called in by the lender at will; only the instalments come due, and only as they arrive. The common allowance is therefore the instalments falling due in the coming twelve months, and some bodies are stricter still, permitting only the payment currently due. There is also a caution attached: the allowance is intended for people whose ability to keep up the repayments would genuinely be affected, not as a default deduction for everyone.

Money owed to you runs the other way and is easy to forget. A loan you made to a relative that you expect to be repaid is generally treated as part of your wealth, even though it is not in your hands.

What Sits Alongside the Gold in the Same Sum

Gold is one line in a larger calculation, and the threshold is tested against the whole of it rather than against any single holding. In broad terms the zakatable side includes cash wherever it sits, gold and silver, stock held for sale in a business, money owed to you that you expect back, and investments held in those things.

Two categories are worth flagging because they trip people up. Shares are treated according to intention: bought to trade, the whole market value is in the base; bought to hold for dividends, the common approach is to include only the share of the company’s own zakatable assets that your holding represents. Pensions turn on the type and on access: defined contribution pots are generally treated differently from defined benefit schemes, and where contributions are deducted at source and never come into your possession, a widely held view is that nothing is due until the money is actually received. Both of these deserve a proper answer from someone qualified if the sums are meaningful.

What does not enter the base is the ordinary furniture of a life: your home, your car, your clothes, the tools of your trade. Zakat is a charge on accumulated wealth, not on possessions, which is why a zakat base is a narrower thing than a net worth calculation and cannot be lifted from one.

Working It Through End to End

Suppose a household holds an 80 gram 22K set, a 22 gram 22K chain and a 13 gram 18K ring, and follows a school on which worn jewellery is zakatable. The scale reads 115 grams. The gold content is 73.28 plus 20.15 plus 9.75, which is 103.18 grams of pure gold — past the 87.48 gram threshold on the gold measure, and past it on the smaller 85 gram figure too, so that particular disagreement does not need resolving here.

Zakat is then two and a half per cent of the market value of 103.18 grams of pure gold. Expressed in metal rather than money, that is 2.58 grams of pure gold — a useful way to hold the figure, because it does not go out of date when the rate moves. Convert it at whatever your local rate is on your anniversary, not at what the pieces cost when they were bought, and not at the international spot price if your market quotes its own.

Two things this example deliberately leaves out. The making charges and tax on the original invoice play no part — zakat is on the metal at today’s value, which is why a heavily worked piece carries a smaller zakat figure than its purchase price suggests. And the gold does not stand alone: cash, savings and receivables join the same sum, deductible liabilities come off, and the threshold is applied to the total.

The order that avoids most errors is: convert each piece to its pure gold weight, add the gold to your other zakatable assets at current value, subtract what is genuinely due, check the total against the threshold you are using, confirm a lunar year has passed, and only then take the two and a half per cent.

Questions About Zakat on Gold