The Islamic Obligation on Gold
Zakat — one of the Five Pillars of Islam — requires Muslims to pay 2.5% of qualifying wealth held for one full lunar year (Hawl) above the minimum threshold (Nisab). Gold is explicitly mentioned in the Quran and Sunnah as a zakatable asset. Understanding the rules correctly ensures you fulfil your obligation accurately.
What is the Nisab for Gold?
The Nisab is the minimum amount of wealth you must hold before zakat becomes obligatory. For gold, the Nisab is 85 grams of pure (24K) gold. This figure is set by the Prophet's (PBUH) hadith specifying 20 gold dinars as the threshold, which scholars have calculated as approximately 85 grams of gold by weight.
To determine today's Nisab in AED: multiply 85 grams by today's 24K gold price per gram. You can use gold24.ae's live calculator to get this figure. If the total gold you own equals or exceeds this value, and has done so for a full lunar year, zakat is due.
What Gold is Zakatable?
All gold held as savings, investment, or excess that you are not regularly using is zakatable. This includes:
- Gold bars and coins (investment gold)
- Gold jewellery stored unused (not regularly worn)
- Digital gold holdings (Sarwa Gold, etc.)
- Gold ETF holdings
There is a scholarly difference of opinion on gold jewellery that is regularly worn by women. The majority Hanafi view is that all gold is zakatable regardless of use. The Shafi'i, Maliki, and Hanbali position is that jewellery in regular use is exempt. Most UAE Islamic scholars follow the Hanafi school, meaning regularly worn jewellery is zakatable. Consult your local scholar if you are unsure which position applies to you.
How to Calculate Zakat on Gold: A Worked Example
Step 1: Gather your gold holdings. Count all gold you own (in grams), including jewellery, bars, and coins. Convert everything to 24K equivalent grams for consistency.
To convert non-24K gold to 24K equivalent: multiply the weight by the karat purity fraction.
- 100g of 22K gold = 100 × 0.9167 = 91.67g of pure gold equivalent
- 50g of 18K gold = 50 × 0.75 = 37.5g of pure gold equivalent
Step 2: Check against Nisab. Total pure gold equivalent = 91.67 + 37.5 = 129.17g. Since 129.17g > 85g (Nisab), zakat is due.
Step 3: Calculate Zakat. The zakat rate is 2.5% of the total gold value at today's price.
Example: 129.17g × today's 24K price per gram (e.g. AED 290/g) = AED 37,459 total value. Zakat = AED 37,459 × 2.5% = AED 936.50.
Combining Gold with Cash and Silver
Many scholars combine gold, silver, cash, and trade goods when calculating the Nisab and total zakatable wealth. Under this approach, if your combined wealth (gold + silver + cash + investment assets) exceeds the Nisab, zakat applies to the total. This is the more cautious approach and is widely recommended.
The gold24.ae Zakat calculator handles the gold component — enter the weights and karats of your gold holdings to get the metal value in AED, then apply the 2.5% rate.
When is Zakat Due?
Zakat is due once a full Islamic lunar year has passed since your wealth first exceeded the Nisab. Most Muslims pay zakat at the same point each year — commonly during Ramadan, as the reward for giving in this month is multiplied. However, you can pay at any time once the Hawl is complete.
If your wealth fluctuates above and below the Nisab during the year, the majority scholarly opinion is that as long as it was above the Nisab at both the beginning and end of the lunar year, zakat is due on the amount held at the end of the year.