Zakat on Gold

What is zakat?

Zakat is the third pillar of Islam and an obligation on every adult Muslim of sound mind whose wealth exceeds a set minimum. The word itself means purification and growth: giving a small, fixed share of your wealth each year purifies the rest and, in the Islamic view, causes it to grow rather than shrink. It is not charity in the ordinary sense, which is voluntary. Zakat is a duty with precise rules about who pays, how much, on what, and to whom it goes.

Unlike an income tax, zakat is a tax on held wealth, not on earnings. You are not assessed on what you earned over the year, but on what you still possess when your zakat date comes around. Someone who earns a great deal but spends it all owes nothing, while someone who quietly accumulates savings owes 2.5% of them every year. This is why zakat is often described as a wealth circulation system: it steadily moves money from those who hoard it to those who need it.

How to calculate zakat, step by step

Calculating zakat by hand is straightforward once you break it into stages. The calculator above follows exactly these steps, but it helps to understand what it is doing.

1. Total your zakatable assets. Add up cash in hand and in the bank, the market value of your gold and silver, shares and investments, money owed to you that you expect to recover, business stock, and any property you bought to resell.
2. Subtract your immediate debts. Deduct what you owe that falls due within the next twelve months: borrowings, the coming year of instalments, bills already due, and unpaid tax.
3. Compare the remainder to the nisab. If your net wealth is below the nisab threshold, no zakat is due this year. If it is equal to or above, you continue.
4. Take 2.5%. Multiply your net zakatable wealth by 0.025. That figure is your zakat.

What is nisab, and which threshold should I use?

Nisab is the minimum amount of wealth a Muslim must hold before zakat becomes obligatory. Below it, no zakat is owed, and a person below nisab may in fact be eligible to receive zakat rather than pay it. The threshold is fixed in weight, set by the Prophet Muhammad (peace be upon him), and only its cash value changes as metal prices move:

• Gold nisab: 87.48 grams of gold (equivalent to 20 mithqal, or 7.5 tola)
• Silver nisab: 612.36 grams of silver (equivalent to 200 dirhams, or 52.5 tola)

In the time of the Prophet these two thresholds were roughly equal in value. Today, because silver has fallen so far relative to gold, the silver nisab is much lower in cash terms, often only a tenth of the gold figure. This difference matters, and scholars hold two positions on it.

The majority view favours the silver nisab, because it is lower, brings more people into the obligation, and therefore sends more wealth to those entitled to receive it. This is the more generous and cautious position, and the one most contemporary scholars and charities recommend. A minority view allows those whose wealth is mainly in cash to use the gold nisab, on the grounds that it better reflects the threshold’s original purchasing power. The calculator lets you choose either basis. If your wealth sits between the two thresholds, using silver means you pay, and using gold means you do not; when in doubt, the silver basis is the safer choice.

When is zakat due? Understanding the hawl

Zakat becomes due once your wealth has remained above the nisab for one full lunar year, a period known as the hawl. The Islamic lunar year is about eleven days shorter than the solar year, which is why your zakat date shifts slightly earlier each Gregorian year.

Your zakat date is the date you first came to possess wealth above the nisab. From then on, you assess your wealth on that same Islamic date every year. If your wealth dips below the nisab during the year but is back above it on your zakat date, most scholars hold that zakat is still due, because the threshold is measured at the start and end of the year, not continuously. Many people simply choose a memorable date, often in Ramadan, both for ease and because the reward for giving is believed to be multiplied in that month.

Zakat on gold and silver

Gold and silver are zakatable in every form and every school: coins, bars, and jewellery all count. Zakat is calculated on the weight you own valued at the current market price, which is why the calculator asks for weight and applies a live gold or silver rate.

Purity matters. Pure gold is 24 carat. 22 carat gold is 91.6% pure, 18 carat is 75% pure, and so on. Zakat is due on the actual gold content, so the calculator converts your carat to pure weight automatically rather than making you do the arithmetic. For silver, sterling is 92.5% pure and household silver is often 90%.

The one area of genuine disagreement is gold worn as everyday jewellery. In the Hanafi school, all gold and silver is zakatable regardless of use, so a woman’s gold jewellery is included in full. In the Shafi’i, Maliki and Hanbali schools, jewellery kept for normal personal wear is generally exempt, though jewellery hoarded as a store of wealth is not. This single distinction changes many people’s zakat significantly, which is why the calculator lets you select your school and adjusts accordingly. Household silver such as cutlery, trays and utensils is zakatable in all four schools.

Zakat on cash, savings, shares and crypto

Cash is the simplest category: every unit of currency you hold is zakatable, whether it sits in your hand, a current account, a savings account, or a digital wallet. Money set aside for a future purpose, such as Hajj savings or a house deposit, is still fully zakatable, because it is still yours.

Shares depend on your intention. Shares bought to trade are zakatable at their full market value on your zakat date. Shares held long term for dividends are zakatable only on the underlying zakatable assets of the company, which most scholars estimate at around a quarter of the market value when the exact figure is unknown. Pensions and provident funds are zakatable on the portion you could access, typically your own contributions. Cryptocurrency is treated like a tradeable asset: its market value on your zakat date is zakatable, exactly like shares held to trade.

Zakat on property and business

Property is one of the most misunderstood categories, so it is worth being precise:

• The home you live in carries no zakat, however many homes you keep for family use.
• Property you rent out carries no zakat on its value, but the rent you have collected and still hold on your zakat date does count.
• Property bought to resell is trade stock, and is zakatable at its full current market value.

For a business, zakat is due on saleable stock at cost, raw materials, finished goods, cash held by the business, and money owed to you by customers. It is not due on the tools of the trade: premises, machinery, vehicles, fixtures and fittings are all exempt, because they are used to generate wealth rather than being the wealth itself. From the total you may subtract what the business owes to suppliers and genuine bad debts.

Which debts can I deduct?

You may deduct debts that are due now or within the coming twelve months. This includes borrowings, the next year of loan or mortgage instalments, rent and bills already due, wages owed to staff, and tax that is payable now. You may not deduct bills that are not yet due, the entire outstanding balance of a long-term loan such as a full mortgage, or any interest element, since interest is not a debt Islam recognises for this purpose. In the Shafi’i school, debts are not deducted at all, and zakat is assessed on gross assets. The calculator applies your school’s rule automatically.

Who can receive zakat?

Zakat cannot be given to anyone you choose. The Qur’an names eight categories of eligible recipient in Surah At-Tawbah, verse 60:

• The poor (al-fuqara)
• The needy (al-masakin)
• Those employed to administer zakat
• Those whose hearts are to be reconciled
• Those in bondage, to free them
• Those burdened with debt
• Those in the cause of Allah
• The stranded traveller

Zakat given outside these categories does not discharge the obligation. This is also why a website or its operator cannot receive your zakat: running a tool is not one of the eight categories. Any support you give this calculator is sadaqah, voluntary charity, and must never replace the zakat you owe to those entitled to it.

Frequently asked questions

How much zakat do I pay?

2.5% of your net zakatable wealth, provided that wealth is above the nisab threshold and has been held for one lunar year. On 100,000 of net wealth, zakat is 2,500.

Is this zakat calculator free?

Yes. It is completely free, there is no account, and there is no limit on how many times you use it. It works on any device and needs no app.

Which currencies does the calculator support?

All of them. The calculator covers 95 currencies including PKR, INR, LKR, BDT, IDR, MYR, AED, SAR, EGP, NGN, TRY, GBP, EUR, USD and CAD, with gold and silver prices converted into your currency automatically from live market data.

Are the exchange rates live?

Yes. Both the metal prices and the currency conversion use live market data, refreshed daily rather than tick by tick. The rate used is the market mid-rate, which is the correct basis for valuing wealth. If your local rate differs, you can type over the gold and silver prices and the calculation follows your figure.

Do I pay zakat on my salary?

Not on the salary itself. You pay on whatever remains in your possession on your zakat date, so salary you have spent during the year carries no zakat, while savings from it do.

Do I pay zakat if I am in debt?

Possibly. Deduct the debts due within the next twelve months from your assets. If what remains is still above the nisab, zakat is due on that remainder. A long-term mortgage does not cancel your zakat, only the coming year of instalments is deductible.

Is zakat calculated on savings or on income?

On savings and assets held, not on income earned. Zakat is a tax on accumulated wealth, not an income tax.

What is the difference between zakat and sadaqah?

Zakat is obligatory, fixed at 2.5%, due annually, and restricted to eight categories of recipient. Sadaqah is voluntary, any amount, given any time, to anyone. Both are rewarded, but only zakat discharges the third pillar of Islam.

Are my figures stored anywhere?

No. The whole calculation runs in your browser. Nothing is sent to a server, there is no account, and closing the page erases everything you entered.

This calculator gives a reliable estimate for ordinary situations. For a complex estate, a mixed business, an inheritance, or an unusual asset, consult a qualified scholar. Metal prices should be verified against your local market on the day you calculate.