Table of Contents
The Qur’an Commands Zakat in Numerous Verses
Zakat Applies to Many Forms of Wealth
Why is Zakat on Gold Important?
How to Calculate Zakat on Gold?
Zakat on Savings, Cash, and Modern Assets
Is Interest (Riba) Haram in Islam?
Historical Development of Zakat on Gold
Step-by-Step Practical Examples
Common Misconceptions About Zakat on Gold
Practical Tools for Muslims Today
Zakat is not simply a form of charity-it is a pillar of Islam, ranking alongside prayer, fasting, and pilgrimage. The word “zakat” comes from the Arabic root zak, meaning purification and growth. By giving zakat, Muslims purify their wealth and help their communities flourish.
This makes zakat a universal financial obligation designed to keep wealth circulating and prevent economic stagnation.
Gold has been used as money for thousands of years. It is a stable store of value, unlike paper currencies which lose value through inflation. Because of its durability, scholars chose gold (and silver) as the benchmark for zakat nisab.
The Prophet Muhammad ? emphasised the importance of zakat on gold and warned against hoarding it:
Ensures wealth does not remain idle in safes and vaults.
Transfers wealth to the poor, needy, and indebted.
People are incentivized to use gold productively instead of letting it sit unused.
Keeps a Muslim’s finances halal and blessed.
Thus, zakat on gold links personal piety with community well-being.
The nisab is the minimum wealth required before zakat becomes obligatory.
If your gold holdings reach or exceed this weight and remain with you for one full lunar year (haul), you must pay zakat.
This comes from the hadith:
“There is nothing on you in gold until it reaches twenty dinars. When you have twenty dinars and a year has passed, half a dinar is due.” (Abu Dawud)
Twenty dinars is equivalent to about 85 grams.
So if your total zakat on assets (including gold, savings, and cash) is equal to or above $5,525, zakat is due.
Not every Muslim automatically owes zakat. Certain conditions apply:
Muslim: Non-Muslims are not obligated.
Adult & Sane: Zakat is only due to adults of sound mind.
Ownership: The gold must be fully owned and under your control.
Nisab: Your holdings must meet the nisab threshold
Haul: One lunar year must pass while you own that gold.
Surplus Wealth: Gold must be beyond basic needs like clothing, housing, and food.
Only when these are met does zakat on gold become obligatory.
Jewelry has always been central to zakat debates. The key question: is gold jewelry used daily for adornment exempt from zakat?
Investment jewelry (stored, unused, bullion, coins): Always zakatable.
Hanafi: Zakat due even on personal jewelry.
Shafi’i, Maliki, Hanbali: Jewelry for regular use is exempt.
Excessive jewelry: If a woman owns unusually large quantities, zakat is required.
A woman once came to the Prophet with her daughter wearing gold bracelets. He asked: “Have you given zakat on this?” She said no. He replied: “Would you like Allah to put two bracelets of fire on you instead?” (Abu Dawud)
This clear hadith shows that jewelry, even if worn, can be subject to zakat.
Men are prohibited from wearing gold. However, if a man owns gold jewelry, he must still pay zakat on it, because zakat is based on ownership, not use.
Scholars across the four main schools have nuanced views:
Hanafi: Strongly insist zakat applies to all gold and silver, whether used or stored.
Shafi’i, Maliki, Hanbali: Exempt jewelry for ordinary personal use but require zakat on stored or excessive amounts.
Modern jurists: Some allow small exemptions but recommend paying zakat as a precaution.
This diversity shows Islam’s flexibility, but most Muslims choose to pay zakat on jewelry to be safe.
The calculation process is simple:
Gold weight × Price per gram × 0.025
For jewelry with stones: Ask a jeweler to weigh the gold only, excluding diamonds and gems.
The Prophet used both gold and silver as benchmarks.
Zakat on Gold: Stable and fair.
Zakat on Silver: Much lower threshold, making more people eligible.
Today, silver nisab (~$500) is far lower than gold nisab (~$5,500). Using silver nisab might force poor people to pay zakat, so many scholars prefer the gold standard.
Zakat is not limited to gold. It applies to:
Zakat on savings: Money in bank accounts.
Zakat on cash: Notes and coins.
Zakat on assets: Trade goods and business stock.
Zakat on property: Only if purchased for trade or resale.
Zakat on investments: Halal investment portfolios, retirement funds.
This ensures zakat remains relevant in the modern world.
Yes. Interest (riba) is categorically forbidden.
Allah says:
“Allah has permitted trade and forbidden riba.” (Qur’an 2:275)
The Prophet (SAW), cursed those who take, give, record, or witness interest (Muslim).
This is why Muslims are encouraged to use halal stocks, Islamic savings accounts, and gold investments—all of which are subject to zakat but free from riba.
These examples show zakat covers all forms of wealth, not just gold.
“Zakat is only on cash”
Zakat applies to gold, silver, savings, property, and investments.
“Jewelry is exempt”
Only small daily-use jewelry may be exempt. Excessive amounts are zakatable.
“Diamonds and pearls need zakat”
Only gold and silver require zakat unless traded as business.
“Paying zakat decreases wealth”
Prophet said: “Charity does not decrease wealth.” (Muslim)
Zakat calculator online: Offered by Islamic charities.
Jewelers: Can weigh gold excluding stones.
Islamic finance apps: Track nisab, savings, and haul.
Local imams and fatwa boards: Provide rulings for specific cases.
A: Weigh only the gold portion. Pay 2.5% of that value.
A: Yes, in Hanafi school. Other schools exempt daily-use items. Safer to pay.
A: Yes, actual gold may be given directly to the poor.
A: Yes. Zakat is based on ownership, not usage.
A: Yes, if bought for resale or investment. Personal homes are exempt.
A: Every adult Muslim of sound mind with wealth above nisab for one lunar year.
A: Yes, at 595g.
A: Yes, though annually is standard. Some Muslims pay monthly for convenience
Hassan is a financial writer at Vairt, specializing in halal investing and ethical wealth management. He simplifies complex financial topics to help Muslim investors explore Shariah-compliant opportunities in real estate, stocks, gold, and more. His goal is to empower readers with clear, practical insights for confident and long-term wealth building.
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