Praise be to Allah. I recently found myself wondering about the topic of Zakat on gold—especially since I know many people who have gold savings but don’t know how to calculate Zakat on gold correctly. I decided to look deeper into the matter and share it with you.

First, Zakat is not just a financial obligation; rather, it is a great act of worship that purifies the self and wealth. Allah Almighty said: “Establish prayer and give Zakat and obey the Messenger, that you may receive mercy.” And the Prophet (peace be upon him) strongly warned against failing to give it, saying: “There is no owner of gold or silver who does not give its due, but that on the Day of Resurrection he will be branded with plates of fire.” Truly, that is truly frightening!

As for how to calculate Zakat on gold, the matter is actually simple. Sharia requires paying 2.5% of the value of gold when it reaches the nisab and a full Hijri lunar year passes over it. The nisab is the minimum threshold, and scholars have estimated it at 85 grams of pure gold of 24 karat.

Now, here is an important point: Zakat applies to all types of gold—whether it is bars, coins, or even gold investment funds. However, there is a difference among jurists regarding jewelry used for daily adornment. The majority hold that there is no Zakat on it, while the Hanafi school considers Zakat on it to be obligatory.

How to calculate Zakat on gold in practice:

If you own 100 grams of 24 karat gold and the price per gram is 400 riyals, the calculation is:
- Total value = 100 × 400 = 40,000 riyals
- Zakat = 40,000 × 2.5% = 1,000 riyals

But if you have 21 karat gold (purity 87.5%):
- Pure gold = 100 × 0.875 = 87.5 grams
- Value = 87.5 × 400 = 35,000 riyals
- Zakat = 35,000 × 2.5% = 875 riyals

And if the gold is 18 karat (purity 75%):
- Pure gold = 100 × 0.75 = 75 grams
- Value = 75 × 400 = 30,000 riyals
- Zakat = 30,000 × 2.5% = 750 riyals

Note that in the last example, the amount does not reach the nisab (85 grams), so Zakat is not required.

A sensitive point: how to calculate Zakat on gold differs depending on your intention. If you own the gold for saving or investment, Zakat is obligatory. But if it is for personal adornment, there is juristic disagreement regarding its ruling.

As for modern investments such as gold index funds (ETFs) and the shares of mining companies, Zakat is also due on them. But the method differs:
- Gold-backed funds: Zakat is paid at 2.5% of their market value
- Mining company shares: Zakat is paid according to your intention—if they are held for trading, Zakat is due in full; if they are held as a long-term investment, Zakat is due only on the profits

As for those who are entitled to Zakat, Allah mentioned 8 categories in the Qur’an: the poor, the needy, those employed to administer it, those whose hearts are to be reconciled, in bondage (freeing slaves), those in debt, in the cause of Allah, and the traveler. Zakat should not be given to the wealthy, to non-believers, or to those whose support you are required to provide.

Something very important: it is not permissible to delay Zakat after it becomes due, nor is it permissible to pay it from unlawful wealth. Also, do not count it as coming from old debts; pay it from new wealth.

In conclusion, calculating Zakat on gold is not complicated, but it requires accuracy and sincerity. The important thing is to give it with a sincere intention at the time it becomes obligatory, because Zakat is not merely a financial duty—it is an act of obedience to Allah and a means of achieving social solidarity among us.