Gold Zakat: How to Calculate Your Religious and Financial Obligation?

Gold is not just a precious metal used for adornment; it is real wealth with specific Islamic obligations. When you own a certain amount of gold, you may be obliged to pay Zakat on gold — a clear Islamic duty with no ambiguity. Zakat, in general, is considered one of the fundamental pillars of Islam, and the Quran emphasizes its importance with the verse: ﴿Establish prayer, give zakat, and obey the Messenger that you may receive mercy﴾. However, many Muslims overlook the obligation of Zakat on gold specifically, despite its significance and the widespread ownership of gold as a means of savings and protection against inflation.

Understanding the Basics of Zakat on Gold

Zakat on gold is calculated at a rate of 2.5% of the pure gold value, but this does not apply to everyone who owns gold. There are specific conditions that must be met first:

First: The gold must reach the Nisab: The Islamic minimum threshold that obligates paying Zakat. The Prophet ﷺ said: “There is no Zakat on you in gold until you have twenty dinars.” Scholars have estimated this to be approximately 85 grams of pure 24-karat gold.

Second: One full Hijri year must pass: Zakat is only due if you have held the gold for a full lunar year without interruption.

Third: You must have full ownership: The gold must be entirely yours, not owed to anyone else.

If all these conditions are met, you are obliged to pay Zakat.

When to Pay Zakat on Gold - Different Cases

Case One: Investment and Trade Gold

If you own gold for investment or trade purposes — whether bullion, gold coins, or even gold investment funds — Zakat is obligatory without dispute among scholars. Imam Nawawi pointed out in Al-Majmu’ that jewelry not used and kept for savings requires Zakat. Likewise, shares in mining companies and gold ETFs (ETFs) are subject to Zakat.

Case Two: Jewelry Used for Daily Adornment

Here, scholars differ. The majority of scholars from Maliki, Shafi’i, and Hanbali schools believe that jewelry used for adornment — such as rings, bracelets, necklaces — does not require Zakat, treating it like clothing and tools that are not subject to Zakat.

However, the Hanafi school holds a different view: Zakat must be paid on all gold and silver, even if used for decoration. They cite a hadith in Sunan Abi Dawood about a woman who did not pay Zakat on her bracelets, and the Prophet ﷺ warned her of Hellfire. There is also a third opinion among some Malikis that Zakat on jewelry is only obligatory once.

Case Three: The Gold Owned by a Man

Islam prohibits men from wearing gold, as the Prophet ﷺ said: “Indeed, these two are forbidden for the men of my Ummah,” referring to gold and silk. But this prohibition on use does not exempt the gold owned by a man from Zakat, whether jewelry or bullion.

How to Calculate Zakat on Gold - Numbers

The calculation is very simple. The basic formula is:

Zakat on gold = 2.5% × Market value of pure gold

But before calculating, you need to know your gold’s purity, as the purity percentage varies:

• 24 karat: 100% pure gold
• 21 karat: 87.5% pure gold
• 18 karat: 75% pure gold

The Nisab varies by purity:

• 24K: 85 grams
• 21K: Approximately 97 grams
• 18K: Approximately 113 grams

Practical Example for 24K

You own 100 grams of 24K gold. The market price per gram of pure gold is 400 SAR.

Calculation:

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

Practical Example for 21K

You own 100 grams of 21K gold. The price per gram of pure gold is 400 SAR.

Calculation:

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

Practical Example for 18K

You own 100 grams of 18K gold. The price per gram of pure gold is 400 SAR.

Calculation:

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

Note that this last example does not reach the Nisab of (85 grams of pure gold), so Zakat is not obligatory.

Who Deserves to Receive Zakat on Gold?

Zakat on gold is not given to anyone you wish. The Quran precisely specifies who is eligible: ﴿Zakat expenditures are only for the poor, the needy, those employed to collect (Zakat), those whose hearts are to be reconciled, to free captives, those in debt, in the cause of Allah, and for the traveler﴾ [At-Tawbah: 60].

These are only eight categories:

1- The Poor: Those who lack food, clothing, and shelter.

2- The Needy: Those with little but not enough.

3- The Zakat Collectors: Those who gather and distribute Zakat (employees and collectors).

4- Those Whose Hearts Are to Be Reconciled: To strengthen their faith or gain their affection for Islam, whether new Muslims or those whose Islam is hoped for.

5- In Ransom: Helping those seeking liberation from slavery and bondage.

6- Those in Debt: Those burdened with debts they cannot pay.

7- In the Cause of Allah: Spending on what benefits Islam, religion, and defending the community.

8- The Traveler: The stranded traveler who needs help to return home.

Who Does Not Qualify for Zakat on Gold?

There are specific groups whom Sharia forbids giving Zakat:

Ahl al-Bayt (Prophetic family): The Prophet ﷺ said: “Indeed, these charities are filth from people.” If they are in need, they should be given the best of Muslim wealth.

The Rich: The Prophet ﷺ said: “Zakat is not permissible for the wealthy.” Those who are self-sufficient in wealth or income do not take Zakat.

Kafir (Non-Muslims): Most scholars agree that non-Muslims should not receive Zakat, as it is a worship exclusive to the Muslim community.

Those whose expenses you are obliged to support: Parents, children, spouses, and the sister without a guardian — you must support them from your own wealth.

The Lazy but Capable of Working: Those who have the ability to earn but choose not to out of laziness.

Shariah Conditions for Paying Zakat on Gold

To ensure your Zakat is valid and compliant with Shariah, there are 12 conditions to observe:

1- Pay it promptly: It must be paid immediately upon the completion of the lunar year, without delay.

2- Avoid delay without a valid reason: Delaying Zakat without a legitimate excuse is sinful.

3- Do not offset old debts: Old debts do not exempt you from paying Zakat on your gold.

4- Pay from lawful wealth: Zakat cannot be paid from doubtful or haram money, such as mixed with usury.

5- Sincerity in worship: Zakat is for Allah alone, not for show.

6- Adhere to the prescribed categories: Only the eight categories specified.

7- Do not convert Zakat into voluntary charity: Zakat is an independent act of worship with a specific intention.

8- Pay the full amount: Partial payment does not suffice.

9- Do not pay on behalf of others without authority: Zakat is a personal act of worship.

10- Do not favor non-eligible recipients: Do not give to relatives as a favor if they are not eligible.

11- Do not link it to worldly benefits: Zakat should not be exchanged for services or worldly gains.

12- Avoid deception: Intentionally reducing weight or price to evade Zakat is forbidden.

The Importance of Paying Zakat on Gold

Paying Zakat on gold is not just a simple financial obligation. It has profound spiritual and social benefits:

Purification of Wealth: Zakat purifies wealth from impurities and increases barakah.

Fostering Generosity: It cultivates the habit of giving, generosity, and sharing.

Achieving Justice: It redistributes wealth from the rich to the poor, reducing social inequalities.

Great Reward: The Prophet ﷺ said about those who withhold Zakat: “No owner of gold or silver who does not pay its due, but on the Day of Resurrection, it will be heated in Hellfire and branded on his sides, forehead, and back, and it will be heated and branded for him, then it will be said: ‘This is what you hoarded for yourself.’ Then it will be poured into his belly, and his sides, and his back, and it will be heated in Hellfire, and he will be punished with it” [Muslim].

Non-Material Zakat (Digital Gold and Investments)

Zakat is not limited to physical gold (jewelry and bullion). Digital gold and gold investments also require Zakat:

Gold ETFs (

If you own gold-backed ETFs, they are treated as owning the gold itself. Zakat is due at 2.5% of their market value after a full lunar year.

) Mining company shares and gold stocks ###

Calculating Zakat here depends on your intention:

• If for trading: Zakat on market value at 2.5%
• If for long-term investment: Zakat only on cash profits

Profit Calculation (

For physical gold or supported funds: evaluate the total gold value at market price at the end of the year, add profits, and pay 2.5% if the Nisab is reached.

For non-backed tools: Zakat only on realized cash profits at 2.5%.

Frequently Asked Questions about Zakat on Gold

Q: If I buy new gold, when does Zakat start?
If a full lunar year has not passed since your purchase, Zakat is not due yet. It becomes obligatory after a complete lunar year from the date you acquired it.

Q: Can I pay Zakat in cash instead of the gold itself?
Yes, it is permissible to pay the equivalent in cash based on the market price on the day of Zakat.

Q: What if I own gold of different purity levels?
Combine all types after converting to 24K gold, then calculate Zakat on the total.

Q: Does pledged gold (mortgaged) require Zakat?
If you are the true owner of the pledged gold, then yes, Zakat is due.

Q: What about gifted or inherited gold?
The lunar year count begins from the actual ownership date, whether gift or inheritance.

Q: Can I combine my gold with my mother’s to reach the Nisab?
No, each person calculates their own Nisab separately. Gold is only combined if it is truly joint ownership.

Summary

Zakat on gold is a clear Islamic obligation, due on every Muslim who owns 85 grams of pure gold or its equivalent in different grades, after a full lunar year of ownership. The Zakat rate is 2.5% of the market value.

The conditions are straightforward, and the calculation is simple, but adherence to the Islamic rules is essential. Whether your gold is physical, investment, or digital, the ruling remains the same. What matters is understanding that Zakat is not just a financial burden but an act of worship that purifies the soul, promotes social justice, and pleases Allah Almighty.