What is Nisab? The Zakat Threshold Explained

What is Nisab?

The Arabic word nisab (نصاب) is rooted in the triliteral n-s-b (ن-ص-ب), which in classical Arabic carries the meanings of “basis,” “origin,” “minimum standard,” and “that which is erected as a marker.” In Islamic jurisprudence it has a precise technical meaning: the minimum quantity of a specific type of wealth below which the zakat obligation does not arise. The nisab concept reflects a fundamental principle of Islamic economic ethics, namely that obligatory charity should be taken only from those who have a genuine surplus beyond their own needs, not from those who are themselves on the edge of financial difficulty.

Understanding nisab is the essential first step in any zakat calculation. Before asking “how much zakat do I owe?” a Muslim must first ask “do I meet the nisab?” The two questions seem simple, but they involve multiple variables: which nisab standard applies (gold or silver), what counts as zakatable wealth, which debts can be deducted, and whether the wealth has been held above nisab for the required lunar year. This guide answers all of those questions in depth. For a broader introduction to zakat itself, see the Complete Guide to Zakat.

Prophetic Foundation

The nisab thresholds are established not by Quranic verse directly but through the Sunnah, the authenticated statements and practices of the Prophet Muhammad (peace be upon him). This makes nisab a matter of hadith jurisprudence, and the precise weights used by different schools reflect differences in how scholars have interpreted and weighed the relevant narrations. The foundational hadith come from multiple chains of transmission collected in the major hadith collections.

“There is no zakat on less than five awsuq of dates, no zakat on less than five camels, and no zakat on less than five awaq of silver.”

— Sahih al-Bukhari 1405; Sahih Muslim 979 (narrated by Abu Sa'id al-Khudri)

The five awaq (plural of uqiyah) mentioned in this hadith equal 200 dirhams in the monetary system of Prophetic Medina, establishing the silver nisab. A second category of narrations specifically addresses gold. The most cited is the hadith transmitted by Ali ibn Abi Talib (may Allah be pleased with him) in which the Prophet set the gold nisab at 20 dinars (also called mithqal, a unit of weight approximately equal to 4.25 grams), thus establishing that 20 x 4.25 = 85 grams of gold is the minimum for gold-based zakat.

“When you possess twenty dinars and a year passes over them, half a dinar is due (as zakat). Whatever exceeds that, it will be calculated proportionally. And there is no zakat on property until a year passes over it.”

— Sunan Abu Dawud 1573 (narrated by Ali ibn Abi Talib)

The “half dinar” on 20 dinars establishes a 2.5% rate for gold (0.5 out of 20 = 2.5%), confirming that both the nisab and the rate are prophetically sourced. Scholars who have examined the hadith literature on both gold and silver nisab note that the two thresholds were set at a time when the exchange ratio between gold and silver was approximately 1:10, meaning 20 dinars and 200 dirhams represented roughly the same economic value. The dramatic divergence in the purchasing power of the two metals in the modern era is the root cause of the debate about which standard to apply today.

The Gold Standard (85g)

The gold nisab is 20 mithqal (dinars) of pure gold, which scholars translate to a gram weight of either 85g or 87.48g depending on the value of the mithqal used. The most widely adopted scholarly figure today is 85 grams, based on the calculation that one mithqal equals 4.25 grams (4.25 x 20 = 85g). Some scholars, particularly in South Asian and certain Gulf scholarly traditions, use 87.48 grams based on a slightly different determination of the classical mithqal weight. The difference is small (less than 3%) and has minimal practical impact on whether someone is above or below the threshold.

At the time of writing (early 2025), with gold trading at approximately $88 per gram, the gold nisab is close to $7,480. This figure is not static: in early 2020, when gold was around $55 per gram, the gold nisab was approximately $4,675. In periods of high gold prices, the gold nisab can rise above $9,000 or even $10,000. The implication is significant: a person with $7,000 in savings might owe zakat in one year (when gold prices are lower) but not in another (when gold is at a peak). This is why checking the live nisab value each year at your zakat anniversary date is essential rather than relying on a memorised figure.

The gold nisab applies to monetary wealth under the Maliki, Shafi'i, Hanbali, Ja'fari, and Ibadhi schools. All of these schools use it as the benchmark against which a person's combined zakatable assets (cash, savings, investments, trade goods) are compared. It does not mean a person must literally hold 85 grams of gold: the gold nisab merely defines the monetary value threshold. If your net zakatable assets in cash and investments total $9,000, that is above the gold nisab (approximately $7,480) and zakat is due, even if you hold no physical gold at all. Use our Gold Zakat Calculator to compute zakat specifically on gold holdings.

The Silver Standard (595g)

The silver nisab is 200 dirhams of pure silver. Classical Islamic jurisprudence equates the dirham to either 2.975 grams (giving 200 x 2.975 = 595 grams) or 3.0618 grams (giving 612.36 grams, used in some South Asian scholarly traditions). The 595 gram figure is the more widely adopted standard globally. At current silver prices of approximately $0.90 per gram, the silver nisab works out to approximately $535, making it dramatically lower than the gold nisab.

A critical feature of the silver nisab is that it has become extremely low in real terms due to silver's dramatic depreciation against most currencies over the past century. When the Prophet established the 200 dirham silver nisab, silver and gold maintained a relatively stable ratio of approximately 1:10. In the 21st century that ratio has widened to roughly 1:80 or higher, meaning silver has lost most of its relative purchasing power compared to gold. A person with merely $600 in a savings account would meet the silver nisab and owe zakat under Hanafi rules: $600 x 2.5% = $15. The same person owes nothing under the gold nisab standard.

Proponents of the silver nisab argue this is precisely the point: zakat should reach as many of the poor as possible by also obligating more of the modestly wealthy. Critics argue the silver standard imposes an unfair burden on middle-class and working Muslims who have modest savings that represent genuine financial necessity rather than surplus wealth. This debate remains unresolved in contemporary Islamic jurisprudence. Use our Silver Zakat Calculator to compute zakat on silver holdings specifically.

Why Two Standards? Which to Use Today

The existence of two nisab standards is not a flaw in Islamic jurisprudence: it reflects the dual-currency monetary system of 7th century Arabia, in which gold dinars and silver dirhams co-existed as the principal stores of value and media of exchange. When the Prophet set nisab thresholds for both metals separately, the two standards were economically equivalent. The problem arose over subsequent centuries as gold and silver diverged in market value, turning what was once a single economic threshold into two very different monetary benchmarks.

Contemporary scholars have approached the question of which standard to use in several ways. The majority position among Maliki, Shafi'i, and Hanbali scholars is to retain the gold nisab as the prophetically established benchmark for monetary wealth, arguing that gold has historically served as the primary standard of value and that the Prophet's specific statements about gold nisab (including the hadith from Ali ibn Abi Talib) represent the authoritative ruling. They note that silver's dramatic depreciation makes the silver nisab an anachronism that no longer reflects the concept of “surplus wealth” the nisab is designed to measure.

Hanafi scholars and institutions, particularly those associated with the Deobandi and Barelvi traditions of South Asia, maintain the silver nisab. Their reasoning combines textual fidelity (both standards are prophetically established), jurisprudential principle (the purpose of nisab is to include the maximum number of people in the redistributive mechanism), and tarjih (preferential weighting) in favour of the standard that expands zakat reach. Some contemporary scholars in this camp also argue that using the silver nisab is more precautionary (ihtiyat): if you are above the silver nisab but below the gold nisab, paying zakat ensures you have fulfilled your obligation regardless of which standard is the “correct” one. See the Guide to Choosing an Islamic School for more context on following a madhab.

Current Nisab Values in Major Currencies

Because nisab is defined in grams of precious metal rather than a fixed monetary amount, its value in any currency changes daily with gold and silver market prices. The table below shows approximate nisab values based on typical 2025 price ranges. For live, up-to-the-minute values, use the Nisab Calculator.

Madhab Differences on Nisab

While all six major schools of Islamic jurisprudence agree on the prophetic weights for gold and silver nisab, they differ on which standard applies to modern monetary wealth, how the hawl interacts with nisab, and whether gold and silver holdings can be combined to collectively reach nisab. The following overview summarises the key differences.

The combining question (can gold and silver holdings be aggregated to reach nisab together?) has practical significance for people who hold modest amounts of both metals. A person with 40g of gold (below the 85g gold nisab) and 300g of silver (below the 595g silver nisab) might still collectively meet nisab if their combined value exceeds the relevant threshold. The Hanafi and most Maliki scholars permit this aggregation; Shafi'i and Hanbali scholars generally do not, requiring each metal to independently meet its own nisab before zakat is due on it.

Nisab for Different Asset Types

The gold and silver nisab thresholds apply specifically to monetary wealth and assets that function as stores of value or mediums of exchange. Different categories of wealth have their own separate nisab rules rooted in the prophetic tradition, and some forms of wealth (such as primary residences or personal vehicles) are entirely exempt from zakat regardless of their value.

For a complete step-by-step guide to calculating zakat across all asset classes, including how to aggregate different asset types and apply the correct nisab, see the How to Calculate Zakat guide. The Zakat Calculator on this site walks through each asset class systematically and checks nisab automatically.

Nisab and Modern Wealth (Stocks, Crypto, Pensions)

Classical Islamic jurisprudence developed the nisab concept around tangible wealth: gold, silver, livestock, and agricultural produce. The 21st century has introduced asset classes that classical scholars never contemplated, requiring contemporary jurists to apply the underlying principles of nisab to new forms of wealth. The key principle is that nisab and hawl conditions apply to any asset that constitutes “zakatable wealth” (mal zakawi): an asset that (a) has monetary value, (b) is owned or controlled by the individual, and (c) is surplus to immediate personal need.

Publicly traded stocks: The majority scholarly position treats the market value of publicly traded shares as zakatable monetary wealth assessed against the gold or silver nisab. Long-term passive investors include shares at their current market value; traders apply the trade goods rules at market value. Some scholars apply nisab only to the “zakatable underlying assets” (the company's cash, receivables, and inventory) in proportion to the shareholder's stake, rather than the full share price.

Cryptocurrency: Contemporary scholars including the Fatwa Council of the Muslim World League, Egypt's Dar al-Ifta, and various Gulf fatwa bodies have ruled that cryptocurrency is a form of mal (wealth) subject to zakat. The current market value of all cryptocurrency holdings is included in total zakatable wealth and assessed against nisab. The hawl for crypto typically begins when the value first exceeds nisab; volatile assets that repeatedly cross below and back above nisab create hawl complexity, and scholars advise tracking the nisab date carefully.

Pension and retirement accounts: Accounts you can access (including with penalty, under most scholarly opinions) are included in total zakatable wealth and assessed against nisab. The current market value of accessible pension funds is treated similarly to savings: if it is above nisab and held for a hawl, 2.5% is due. Accounts where access is entirely restricted until a future date (such as annuities or defined-benefit pensions not yet in payment) are treated differently: some scholars defer the nisab assessment until the funds become accessible; others include an estimated present value.

How to Track Your Nisab

Tracking nisab effectively requires two pieces of information: your total net zakatable wealth at the end of each lunar year, and the current monetary value of your applicable nisab threshold on that same date. Because both numbers change over time, a systematic approach is important, particularly for people whose wealth fluctuates or who hold volatile assets like cryptocurrency or stocks.

For people with volatile wealth (such as business owners or cryptocurrency holders), many scholars recommend the “beginning and end” approach: if wealth is above nisab at both the start and end of the hawl, zakat is due even if it dipped below during the year (this is the Hanafi position). Under Shafi'i and Hanbali rules, a dip below nisab resets the hawl, so meticulous tracking is required to determine whether a new year began after the dip recovered. Consulting a qualified scholar for guidance on your specific situation is always advisable when wealth is complex or volatile.