Zakat on money and gold, one example worked from start to finish

This is a general explanation, not a fatwa. For your own situation, ask Egypt's Dar al-Ifta or the recognised fatwa authority in your country.

The conditions before any arithmetic

According to Egypt's Dar al-Ifta, zakat is due on money when it reaches the nisab, a full year has passed over it, it is surplus to the basic needs of its owner and of those they support, and it is free of debt. The amount due is 2.5%.

Dar al-Ifta puts the nisab at the value of 85 grams of 21-carat gold, or the equivalent in other carats. Most jurists count the nisab in pure gold instead: 85 grams of 24 carat, about 97 grams of 21 carat, which is higher. The example below follows Dar al-Ifta's nisab. Either way the nisab is not a fixed sum of money. It moves with the price of gold and is measured at the price on the day you calculate.

Step one: fix your calculation day

The year in question is a lunar (hijri) year. The simplest approach is to fix one hijri date, the day your money first reached the nisab, and calculate on that date every year. If your money fell below the nisab during the year and then recovered, ask your fatwa authority about your case, because the details of that question need an answer specific to you.

Step two: add up what counts

What goes in:

• All cash: at home, in your wallet, in your current account.
• Cash savings, in whatever account or pot they sit.
• Gold you hold for saving and preserving wealth, such as bars and gold coins, at its value on the day.

What stays out: the home you live in, the car you use, furniture and appliances. Jewellery that is worn is a matter of difference of opinion, covered after the example.

The worked example

A hypothetical example. The gold price in it is invented for illustration and is not today's price: 21-carat gold at EGP 4,500 a gram on the calculation day.

Nisab on Dar al-Ifta's basis = 85 g × EGP 4,500 = EGP 382,500.

The zakatable amount, EGP 400,000, is above the nisab of EGP 382,500, so zakat is due.

Zakat = EGP 400,000 × 2.5% = EGP 10,000.

A quick check: 2.5% is the same as dividing by 40, and 400,000 ÷ 40 = 10,000.

The debt deducted here is one that is due and being paid now; for instalment plans that run for years, ask how they should be treated in your case.

If your gold is a different carat

Value each piece at the price per gram of its own carat on the day, add the values to your cash, and compare with the nisab. The comparison is always by value, and Dar al-Ifta states the nisab as the value of 85 grams of 21-carat gold, while most jurists count 85 grams of 24 carat. For a quick calculation at today's price on either nisab, use the zakat on gold calculator and the zakat on savings calculator.

Worn jewellery: a known difference of opinion

There are two well-known positions, and you should know which one you follow:

• Egypt's Dar al-Ifta: no zakat is due on gold a woman owns to wear as adornment; zakat is due on gold owned for saving, preserving wealth or investment.
• Sheikh Abdulaziz ibn Baz, former Grand Mufti of Saudi Arabia: worn gold is zakatable once it reaches the nisab and a year has passed.

In the example, suppose the household also has 40 grams of worn 21-carat jewellery, worth EGP 180,000 at the hypothetical price. Following Dar al-Ifta, it stays out and zakat remains EGP 10,000. Following the other position, it is added: the zakatable amount becomes EGP 580,000 and zakat EGP 14,500. Choose the position you are settled on after asking someone whose knowledge you trust, and keep to it every year. For the wider lesson on halal earning and the basis of the calculation, read Lesson 1.2: Halal earning and working out your zakat.

Where Masareefy helps, and where it does not

In Masareefy you can record gold and silver as assets by weight and carat. The app values them from the world spot price converted at today's exchange rate, with no workmanship and no jeweller's shop price. That gives you an estimate of what your saved gold is worth on any day. The app does not calculate zakat, and it does not know which of your gold is savings and which is adornment. On your calculation day, use the local gram price that day and do the sum yourself, as in the example. For more on recording gold, see the gold tracker page.