Do We Pay Zakat on Gold If We Don’t Own the Nisab (Minimum Zakatable Amount)?

Answered by Ustadh Salman Younas

Question: I’m confused on zakat regarding my wedding rings. I have read that to be liable to pay zakah on gold you must have the nisab which is about 85 grams. So i went to weigh my rings and its only 6 grams. Does the market value of the gold matter? Also, I read conflicting information on whether there is zakat on precious stones. Some advice would be appreciated on these matters.

Answer: wa `alaykum assalam

The zakatable-minimum (nisab) is 87.48 grams of gold. Zakat is due on a yearly basis when a morally-responsible Muslim possesses this amount above and beyond his debts and immediate expenses, and a complete lunar year passes over it.

The important thing to note here is that when calculating one’s Zakat one calculates all his zakatable assets together. “Zakatable assets” include:

(a) Cash – whether in hand or in the bank,
(b) Gold and Silver,
(c) Money lent out,
(d) Trade goods,
(e) Stocks, and
(f) Agricultural produce.

After one calculates the above, one deducts:

(a) Debts, and
(b) Immediate expenses.

Thus, for example, if we assume that 87.48 grams of gold is equivalent to $3000 then this is considered the zakatable-minimum (nisab). A person will then look at all of his zakatable-assets to see whether they reach this value when considered together. So, if a person possesses $1000 in cash, $1000 of gold, and $3000 in trade goods then his total zakatable assets amount to $5000 (supposing he has no money lent out, stocks, or agricultural produce). However, he also has a debt of $500 and his immediate monthly expense amount to $500 also, which will be subtracted. Thus, his total zakatable wealth is $4000. This is above the zakatable-minimum (nisab), so the obligation to pay Zakat will commence.

If one possessed this amount on the 1st of Rabi` al-Awwal then this is when his Zakat year starts. On the 2nd of Rabi` al-Awwal of the next year, he will look at the value of his zakatable-assets again. If they are above the zakatable-minimum (nisab), he will have to pay 2.5% of their combined value as Zakat. Thus, what is taken into consideration is the amount one possesses above the zakatable-minimum (nisab) at the end of one’s Zakat year. This is the amount Zakat is due upon.

As you can see from the above, the amount of gold this person has does not reach the zakatable-minimum when considered alone. However, when calculating Zakat, all zakatable assets are combined to see whether their total value reaches the zakatable-minimum (nisab), even if they may not reach this value when considered separately.

I hope this clarifies the issue for you.

Salman

Checked & Approved by Faraz Rabbani