One of the most common concerns among Muslim women when it comes to paying Zakat is the question of Zakat on gold – what kind of gold jewellery Zakat is obligatory on, how Zakat is calculated on gold, whether Zakat is only paid on gold that is stored for investment purposes or also on gold that is worn. 

We’ve come together with Islamic Relief UK to put together a comprehensive guide on paying Zakat on gold to help you with your Zakat calculation this Ramadan and beyond.

First, what is Zakat and what does gold have to do with it?

As the third pillar of Islam, Zakat is an obligation on every adult, sane Muslim. It is paid annually on wealth that reaches a minimum threshold (Nisab) and has been owned for at least a lunar calendar year. Its purpose is to purify our wealth and redistribute resources within the Muslim community.

Gold and silver are the two values set by the Prophet (ﷺ) and used to calculate the nisab threshold. The nisab is the value of 87.48 grams of gold or 612.36 grams of silver. Gold and silver, in any form, are also forms of wealth and are subject to Zakat. 

What does the Quran and Sunnah say on Zakat on gold?

The severity of not paying Zakat is mentioned many times in the Quran. For example: 

“Those who hoard up treasures of gold and silver and spend them not in the way of Allah; give them the news of a painful punishment, on the Day when that (wealth) will be heated in the Fire of Hell and with it will be branded their forehead, their sides, and their backs, (and it will be said to them:) ‘This is the treasure which you hoarded for yourselves. Now taste of what you used to hoard.’” (Surah At-Tawbah 9:34-35)

The Prophet (ﷺ) said: “One who pays Zakat, Allah will make their wealth increase” (Bukhari)

Do I pay Zakat on gold that I wear or only on those kept for saving or investment purposes? 

There is a difference of opinion on this and a number of scholars believe that gold worn for adornment is not liable for Zakat. This is because it becomes like items such as clothing and other household items that do not have commercial value.

The Hanbali, Shafi, and Maliki position on this is that Zakat is not payable on the gold and silver in women’s jewellery which is worn while the Hanafi position is that Zakat is payable on all gold and silver in one’s possession, regardless if bought to wear or as an investment.

How do we calculate Zakat on gold?

1. Determine if Zakat is due on your wealth: To determine Zakat on gold, consider your net assets, comparing them to the nisab threshold. If your net assets equal or exceed this threshold, Zakat is due on your total wealth at a rate of 2.5%. 

2. Determine the current value of your gold by determining its selling price or weight: You can find out the current value of your gold if you were to sell it by visiting your local jeweller or you can use the weight of your gold and calculate it using the current price of gold in grams. You can also find out the current value of gold per gram here.

3. Finally, calculate the Zakat you owe on your gold: Currently, in March 2024, a gram of 22 carat gold costs approximately £47.32, which equates to £1.18 Zakat per gram. For example, if you own 50 grams of gold jewellery, you would owe £59.15 Zakat (50 grams x £1.18).

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This article has been sponsored by Islamic Relief UK who treat your Zakat as Amanah. Islamic Relief UK support you in calculating your Zakat with perfection and then take the responsibility of distributing it where it is needed the most. Find the current Nisab rate on their website here. 

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Is there Zakat on White Gold Jewellery?

Yes, white gold is an alloy of gold and at least one white metal, usually silver, nickel, manganese, or palladium. White gold is treated like normal gold and is subject to Zakat, as it contains pure gold.

As some scholars are of the opinion that mixed metals are only liable to Zakat if half or more of the metal is gold or silver, you only have to pay Zakat on the gold, but not the silver part of white gold.

The amount of Zakat payable would be calculated by multiplying the full weight of the jewellery by the price per gram for gold of that carat. For example, if you have an 18-carat white gold bangle weighing 50 grams, then 50 grams would be multiplied by the price of a gram of 18-carat gold. This is because 18-carat gold is 18/24 pure gold, so out of the total weight of 50 grams, 37.5 is pure gold.

How do we calculate Zakat on gold-plated jewellery?

Gold plating is a thin layer of real gold over other metals. Metals other than gold and silver are not liable for Zakat. You will calculate the gold content and only pay Zakat on that portion.

How do we calculate Zakat on gold with precious stones?

Precious stones are not liable for Zakat.

In these cases, the most accurate way to calculate will be to visit your local jeweller and ask them to value only the gold and silver parts of your jewellery. The valuations they give will be the total amount on which you have to pay Zakat. 

Remember to note down the total weight of the gold and silver for you to reference each year. 

Can my husband pay Zakat on my gold on my behalf?

While Zakat is a personal obligation and every adult Muslim is required to pay their own Zakat, you may authorise your husband to pay Zakat on your behalf. You must acknowledge the payment and ensure it is done correctly as it is an obligation on you primarily.

Who pays Zakat on gold gifted to my minor children?

According to the Hanafi school, a child is not liable to pay Zakat, even if they possess wealth above the nisab threshold. The first Zakat payment will become due twelve lunar months after the child reaches the age of puberty, if they possess wealth above the nisab.

According to the majority of scholars and the Hanbali, Shafi and Maliki schools, a child who possesses wealth above the nisab value is liable for Zakat, the same as an adult.

What if I haven’t paid Zakat on my gold in the past? 

When settling overdue Zakat for gold, consider the historical value of gold from previous years and calculate using those values.

Let’s assume you have owned 100 grams of gold each year for the past three years, and you haven’t paid Zakat during this time. We will use hypothetical gold prices for each year:

• Year 1: Gold price = $40 per gram
• Year 2: Gold price = $45 per gram
• Year 3: Gold price = $50 per gram

Now, to calculate your missed Zakat, you need to find the current value of your gold for each year separately. 

Year 1:

• Gold Value Year 1=100 grams×$40/gram=$4,000
• Zakat Year 1=$4,000×0.025=$100

Year 2:

• Gold Value Year 2=100 grams×$45/gram=$4,500
• Zakat Year 2=$4,500×0.025=$112.50

Year 3:

• Gold Value Year 3=100 grams×$50/gram=$5,000
• Zakat Year 3=$5,000×0.025=$125

So, if you haven’t paid Zakat for the past three years, the total overdue Zakat on gold would be the total for each year:

$100+$112.50+$125=$337.50

What if I cannot afford to pay Zakat on my gold this year? 

“Allah does not obligate anyone beyond his capacity. For him is what he has earned, and on him what he has incurred.” (Surah Baqarah 2:286)

Zakat is an obligation, and it must be settled annually if you meet the nisab threshold. To pay your Zakat, you can settle it by using the gold that you own, or selling a portion of it that equals the total amount of Zakat owed for the year.

May Allah accept our Zakat, purify our intentions and make us a means of support for those who need us around the world. 

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This article has been sponsored by Islamic Relief UK who treat your Zakat as an Amanah, spending your Zakat donations in the most effective way possible to relieve the suffering of the world’s most vulnerable people.