How to Pay Zakat on Gold?

Zakat on gold becomes obligatory when it reaches the nisab, which is 85 grams or more, and a lunar year (hawl) has passed since its ownership. The amount to be given is a quarter of one-tenth (2.5%). Below are methods to calculate this:

Method 1: Direct Division by 40

Divide the total grams of gold owned by the individual by 40. The result is the amount of zakat to be given in grams. For example, if a person owns 800 grams of gold:

800÷40=20 grams.

Thus, 20 grams of gold must be given as zakat.

Method 2: Stepwise Division

Divide the total grams of gold by 10, then divide the result by 4. The result is the amount of zakat to be given. Applying the same example:

800÷10=80 grams, and then 80÷4=20 grams.

Therefore, 20 grams of gold must be given.

Method 3: Monetary Zakat in Dollars

1. Multiply the price of one gram of gold in dollars by the total grams of gold owned.
2. Divide the result by 40 to calculate the amount of zakat in dollars.

Example Calculation:

• Total gold: 800 grams
• Price per gram of gold: $36

Step 1: Calculate the total value of gold in dollars:

800×36=28,800 dollars.

Step 2: Divide by 40 to find the zakat amount:

28,800÷40=720dollars.

Zakat to be paid: $720, equivalent to the value of 20 grams of gold.

Five Conditions for Zakat Obligation

1. Islam: The payer must be a Muslim. Zakat is a pillar of Islam and is not accepted by non-Muslims. This is derived from the instructions of the Prophet (peace be upon him) to Mu'adh ibn Jabal when sent to Yemen: "Inform them that Allah has prescribed a charity to be taken from their rich and given to their poor."
2. Freedom: Zakat is not obligatory on a slave because they do not own wealth independently; their possessions belong to their master. For example, the Prophet (peace be upon him) said, "If someone buys a slave who owns wealth, the wealth belongs to the seller unless the buyer stipulates otherwise."
3. Ownership of Nisab: The nisab is a legally prescribed amount of wealth. For gold, it is 85 grams, and zakat is 2.5%. For grains and fruits, it is five wasqs (approx. 672 kg).
4. Independent Ownership: The wealth must be owned solely by the payer. For example, zakat is not due on crops that have not been harvested or if the wealth is not yet free for the owner's use.
5. Passing of a Lunar Year (Hawl): The wealth must have been in the owner’s possession for a full lunar year. If the wealth is lost or the owner dies before the year passes, zakat is not obligatory.

Exceptions to the Hawl Condition

Certain types of wealth are exempt from the requirement of the hawl:

1. Crops and Fruits: Zakat is due at the time of harvest, regardless of whether a year has passed.
2. Trade Profits: Profits are calculated and zakat is paid along with the original capital, even if the profits have not been held for a year.
3. Offspring of Livestock: Newborn animals are included in the zakat of their mothers if the mothers meet the nisab and hawl.
4. Rikaz (Buried Treasure): One-fifth (20%) is due upon discovery, without waiting for a year.
5. Minerals: These are similar to crops and are zakatable upon extraction.

The Wisdom Behind Zakat

1. Strengthening Faith: Zakat is a righteous deed that increases faith, seeking Allah's reward, and may lead to forgiveness and paradise.

2. Improving Morals: Paying zakat fosters generosity and gratitude and purifies the soul from greed and miserliness.

3. Blessing in Wealth: Supporting the needy enhances their purchasing power, which in turn benefits the economy and business owners.

4. Social Solidarity: Zakat reduces inequality, promotes mutual support, and limits crimes like theft by fulfilling the needs of the underprivileged.

In Summary, zakat is a fundamental practice designed to purify wealth, promote societal harmony, and achieve balance between the rich and poor, as emphasized in the Qur’an and Sunnah.