Zakat on gold: how it is calculated, step by step

At the end of the lunar year many people ask the same question: how much zakat do I owe on my gold? Most of the answer is arithmetic, but some of it is a matter on which scholars differ. This guide explains the arithmetic with numbers and points out where the differences are, without giving a ruling on them. For your own case, ask a scholar you trust.

The three conditions in short

• Nisab: the minimum amount on which zakat is due. The figure many contemporary fatwa bodies use is 85 grams of pure 24K gold, the equivalent of twenty mithqal.
• Hawl: a full lunar year must pass with the nisab in your ownership.
• Amount: one fortieth, that is 2.5% of the pure gold or of its value.

Step one: turn every piece into pure gold

The nisab is stated in pure gold, but what you own is a mix: a 21K ring, an 18K chain, perhaps a 24K bar. You cannot add those weights as they are, because a gram of 18K holds less gold than a gram of 21K.

The rule: pure gold = weight × karat ÷ 24. In parts per thousand: weight × 875 ÷ 1000 for 21K, 750 for 18K, 916 for 22K.

A worked example

A woman has owned, for a full lunar year, 50 g of 21K, 30 g of 18K and a 20 g bar of 24K. On the day she pays, 24K gold is — for illustration — 5,000 per gram.

The total is 86.25 g, above the nisab of 85 g, so zakat is due — on the view that different karats are added together, which is the majority view.

Jewellery that is worn: a well-known difference

Jurists have long differed on jewellery a woman wears for ordinary adornment. The Hanafi school holds that zakat is due on it; the majority of Maliki, Shafi‘i and Hanbali scholars hold that permissible jewellery kept for use carries no zakat. They broadly agree it is due on jewellery kept as savings, for trade, or beyond what is customary. This guide does not choose between them; it gives you the arithmetic if zakat is due.

At what price is it valued?

If you pay zakat in gold, you need no price: you give 2.5% of the pure gold. If you pay in cash, the usual practice is to value it at the price on the day of payment where you live. Gold shops quote a selling price and a buying price, and scholars have views on which to use; many consider the higher one the more cautious choice.

Zakat on a gold shop

The gold on display in a shop is not jewellery for personal use; it is trade goods. The common approach to zakat on trade goods is to value the stock at the end of the year, add cash and debts others owe you that you expect to collect, subtract debts the shop owes that are due, and pay 2.5% of the net. Scholars differ on details of valuation and debts, so take your figures to the person you ask.

The hardest part of a shop’s zakat is not the percentage but the first number: how many grams of pure gold do you actually hold? A shop that knows its stock by piece count rather than by weight cannot answer that precisely. In ZahabFlow stock is kept by weight for each fineness and the stock screen shows the pure grams, so the calculation starts from a weighed number, not an estimate.