Zakat on Gold and Silver Jewellery
Do I need to pay Zakat on my gold and silver?
Gold and silver in whichever form they are in (jewellery, coins, or ingots etc.) are all subject to Zakat.
If you own personal items made from a mixture of metals, then the gold/silver content is liable to Zakat in the mixed metal.
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.
How much gold or silver do you have to own before Zakat is payable?
This question can be answered in the context of your net assets. You then need to establish whether your net assets equal or exceed the Nisab threshold. If you equal or exceed the Nisab threshold then Zakat is due on all your wealth at 2.5%.
Zakat is due on two types of precious metals – gold and silver.
Gold and silver are used as the basis for calculating your Nisab regardless of currency. This is the threshold of wealth you need to own before Zakat is due.
How do I calculate the value of my gold or silver?
Your local gold jeweller can tell you the current value of your gold assets.
They can do this in two ways:
- They can give you the current value they would buy your gold at if you were to sell it
- Or they can give you the weight of the gold and you can calculate the value using today’s live gold price in grams – this is known as the universal measurement. This is perhaps most suitable to ensure 100% accuracy.
Is there Zakat on white gold jewellery?
White gold is an alloy of gold and at least one white metal, usually silver, nickel, manganese, or palladium. This is added to add durability and strength, as pure gold is a very soft metal. White gold is treated like normal gold and is subject to Zakāt, 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 Zakāt 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 one has 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.
Likewise, if one has a 9 carat white gold bangle weighing 50 grams, then 50 grams will be multiplied by the price of a gram of 9 carat gold. Similarly, this is because 9 carat gold is 9/24 pure gold, so it contains 18.75 grams of pure gold.
Tolas, Boris, and Voris
It is worth noting that in the South Asian subcontinent (i.e. India, Pakistan, Bangladesh, and Nepal), grams may not be used to measure silver and gold. Instead, one of three possible units of measurement may be used; these are either: Tolas, Boris or Voris.
One Tola or Bori or Vori is equivalent to 11.66 grams.
We know that the Nisab threshold for gold is 87.48 grams, so this is the equivalent to 7.2 Tolas, Voris, or Bhoris.
What gold or silver items are Zakatable?
Gold or Silver kept as an investment
Gold and silver, in whichever form kept, as an investment, are always Zakatable.
Personal use ornaments
Items containing gold or silver purchased for personal use as ornaments are Zakatable. This includes ornaments used for house decoration and utensils (such as silver spoons etc).
Gold or Silver designated for personal use
There are differences of opinion regarding whether or not gold and silver jewellery that is kept for personal use should be exempt from Zakat. According to the Hanafi school, Zakat is due on this gold and silver. According to the other schools of Islamic law, Zakat is not due on this.
Other precious metals, stones and mixed assets
Other precious metals like platinum and precious stones such as diamonds and rubies are not subject to Zakat.
Allah knows best