Gold Nisaab: How to Calculate and Your Zakat Obligations in Practical Steps

In the world of investments and savings, gold is considered a safe haven for millions of Muslims. But those who possess a certain amount of this precious metal face an inevitable question: what is the minimum amount that imposes a religious obligation on me? Here comes the concept of the nisab of gold, which determines the actual beginning of this obligation.

What is meant by the nisab of gold?

The nisab of gold is not just an arbitrary number; it is the minimum threshold set by Islamic law to determine when the gold you own becomes subject to zakat. The noble hadith precisely defined this amount: “There is no zakat upon you in gold until you have twenty dinars” – and this specification is not random but based on economic standards.

Scholars have estimated this amount to be equivalent to 85 grams of pure 100% gold. If you own less than this weight, you are not obligated. But if you reach this level and it remains for a full lunar year (Hijri year), then you are required to pay zakat.

An important point here is that the nisab of gold includes all its forms: stored bars, jewelry prepared for saving, savings in gold safes, and even shares of mining companies if they are intended for investment and saving.

Table of the nisab of gold according to different purities

The nisab of gold is not limited to 24-karat gold only. Gold comes in various purities, each with its own equivalent:

Gold Purity | Purity Percentage | Nisab Weight

• 24 karat (Pure gold) | 100% | 85 grams
• 21 karat | 87.5% | approximately 97 grams
• 18 karat | 75% | approximately 113 grams
• 14 karat | 58.3% | approximately 146 grams

Why do weights differ? Because lower purity purities contain other metals mixed with gold. For example, 18-karat gold contains only 75% pure gold, meaning you need to own a larger total weight to reach the same amount of pure gold (85 grams).

How to calculate zakat after reaching the nisab

First step: ensure that your total gold has reached the nisab. Don’t worry if it is spread over several pieces or different purities – they can all be combined.

Second step: calculate the actual pure gold. If you have 100 grams of 21-karat gold, the pure gold = 100 × 0.875 = 87.5 grams.

Third step: get the market price per gram of pure gold on the day zakat is due.

Fourth step: multiply weight by price = total value.

Fifth step: pay 2.5% of this value – this is your zakat amount.

Simple formula: Zakat on gold = (Weight in grams × Purity percentage × Market price per gram of pure gold) × 2.5%

Practical real-life examples

Example 1: 24-karat gold You own 100 grams of pure gold (24-karat), and the market price per gram is 400 SAR.

• Calculation: 100 grams × 400 = 40,000 SAR
• Zakat: 40,000 × 2.5% = 1,000 SAR

Example 2: 21-karat gold You have 100 grams of 21-karat gold, and the price is 400 SAR per gram of pure gold.

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

Example 3: Mixed 18-karat gold You own 120 grams of 18-karat gold and 50 grams of 24-karat gold, with a price of 400 SAR.

• From 18-karat: 120 × 0.75 = 90 grams pure
• From 24-karat: 50 × 1 = 50 grams pure
• Total: 90 + 50 = 140 grams pure
• Value: 140 × 400 = 56,000 SAR
• Zakat: 56,000 × 2.5% = 1,400 SAR

The difference between types of gold and zakat obligations

Not all types of gold you own are subject to the same rules:

Investment and savings gold: Gold bars, gold coins, gold ETFs (ETFs) – all these must have zakat when reaching the nisab. No excuse for evasion here, as they are assets for saving.

Everyday jewelry gold: Rings, bracelets, necklaces you wear daily – there is a scholarly disagreement here. Most scholars say zakat is not due if they are for use, but if you keep them without use for saving purposes, then zakat is obligatory.

Men’s gold: A man is not permitted to wear gold at all, but if he owns it – even by chance or inheritance – and reaches the nisab, zakat is due.

Conditions for paying zakat: When does it become truly obligatory?

Owning the nisab alone is not enough. You must verify three conditions:

First: Full ownership Gold must be fully owned without dispute or condition. Pledged or borrowed gold may have different rulings.

Second: Passing the lunar year (Hawl) A full Hijri year must pass on your ownership of the nisab. If you buy new gold today, zakat is not due this year. But gold owned before a year has passed, then zakat must be paid soon.

Third: Reaching puberty and sanity You must be an adult and sane. A child and the insane are not obligated, but the guardian may pay zakat from their wealth.

Common mistakes in calculating the nisab

First mistake: Not combining different types of gold Some say: I have 50 grams of 24-karat and 60 grams of 18-karat; each does not reach the nisab alone. But this is wrong – they must be combined after converting to pure gold, and the total may exceed the nisab.

Second mistake: Forgetting jewelry intended for saving Some women have valuable jewelry they do not wear, kept in a drawer. If intended for saving, it is zakatable – don’t forget to include it in the calculation.

Third mistake: Confusing gold price with actual market price The gold price on the stock exchange may differ from the price at the jeweler. Use the real market price on the day you pay zakat.

Fourth mistake: Calculating nisab based only on total weight If you have 100 grams of 18-karat gold, the nisab is not 85 grams of total weight, but 85 grams of pure gold (which means 113 grams of total weight).

Non-material gold: ETFs and mining shares

Modern times have introduced new forms of gold that you do not hold physically:

Gold ETFs (ETFs): If you own an investment certificate backed by actual gold, it is treated like gold itself. Calculate its value at market price at each hawl, and pay 2.5%.

Mining company shares: Here, the situation differs – these are not direct ownership of gold. Zakat is calculated on realized profits if for trading, or on part of the share’s value if the company owns direct zakatable assets.

When exactly should zakat be paid?

There is no fixed date. Each person has their own hawl date – from the day they first owned the nisab.

Remember the Hijri date, not the Gregorian. Count the Hijri year from the date of purchase or initial ownership. You can pay zakat slightly before the hawl date, but do not delay beyond the due time.