Gold Nisab value: Zakat on gold and silver

Step 1: Determine the weight of your assets

Weigh all the gold and silver you own, including:

• Jewelry, if applicable under your school of thought.

• Gold and silver bars, coins, or other assets.
  Exclude non-metal components (e.g., gemstones) to determine the net weight.

Formula example:
If you have a gold ring weighing 10 grams with a gemstone of 1.5 carats:
Gemstone Weight = 1.5 × 0.2 = 0.3 grams
Net Gold Weight = 10 − 0.3 = 9.7 grams

Step 2: Check the purity of your assets

Identify the karatage of your gold or silver (e.g., 24K, 22K, 18K). Convert it to pure weight using:
Pure Metal Weight = (Weight × Karat) / 24

Step 3: Find the current market price

Look up the current price of 1 gram of pure gold or silver from reliable sources such as local jewelers, online trackers, or financial institutions.

Step 4: Calculate the total value

Multiply the net weight of your pure gold or silver by its market price:
Total Value = Pure Metal Weight × Price per Gram

Step 5: Determine if you meet the nisab threshold

Compare your total value to the Nisab threshold:

• Gold: 85 grams of pure gold or its monetary equivalent.

• Silver: 612.36 grams of pure silver or its monetary equivalent.

If your total value meets or exceeds the threshold, Zakat is due.

Step 6: Calculate Zakat amount

Apply the Zakat rate (2.5%):
Zakat Amount = Total Value × 0.025

Step 7: Pay Zakat

Pay the calculated Zakat amount in cash or as an equivalent amount of physical gold or silver. Ensure it is distributed to eligible recipients such as the poor and needy.

Example Calculations

Example 1: You own 100 grams of 18K gold. The current market price for 1 gram of pure gold is $60.
Step 1: Convert to pure gold:
Pure Gold Weight = (100 × 18) / 24 = 75 grams
Step 2: Calculate total value:
Total Value = 75 × 60 = $4,500
Step 3: Check Nisab:
Since 75 grams is below the gold Nisab of 85 grams, no Zakat is due.

Example 2: Suppose you have a gold ring with:

• Total weight: 10 grams

• A sapphire gemstone measuring 8 x 6 mm (approximately 1.5 carats)

Step 1: Convert gemstone weight to grams
To convert carats to grams, multiply the gemstone weight by 0.2 (as 1 carat equals 0.2 grams):
Weight in grams = 1.5 × 0.2 = 0.3 grams

Step 2: Subtract gemstone weight from the total weight
Remove the gemstone weight to determine the net gold weight:
Net Gold Weight = 10 − 0.3 = 9.7 grams

Step 3: Use the net gold weight for Zakat calculations
With the gemstone weight excluded, use the net gold weight of 9.7 grams to assess if it meets the Nisab threshold and to proceed with further calculations.