Short answer
On today's value. Zakat on gold is one fortieth (2.5 percent) of the pure gold you own, valued at its market price on your zakat date, not what you paid for it. Making charges and stones are left out.
Zakat on gold is one fortieth of its weight. You may give that gold itself or its value in money; if you pay in money, the gold is valued at its market rate on the day your zakat year completes, and the purchase price, the making charge and any stones are ignored.
The four schools agree on this.
Explanation
Zakat on gold is due on the gold itself, not on the money you once spent on it. So the sum is simple: the weight of pure gold you own, times today's price per gram, times 2.5 percent. If the price has risen since you bought it, you pay on the higher value. If it has fallen, you pay on the lower one. The schools agree that what counts is the gold you own, not what you paid for it; where they differ is on whether jewellery you wear is zakatable at all.
- Weigh each piece, or take the weight from the receipt.
- Convert it to pure gold: 24 carat is pure, 22 carat is about 91.6 percent, 21 carat 87.5 percent and 18 carat 75 percent.
- Add the value of that pure gold to your cash, silver and other zakatable wealth, and check the total against the nisab. Gold alone is checked against the gold nisab; once it is mixed with cash or silver, the total is checked against the silver nisab.
- Pay 2.5 percent of the gold's value, or give one fortieth of the gold itself.
Which price, and which day? Many Hanafi muftis say to use the price you would actually get for the gold if you sold it in your local market, not the higher shop price of new jewellery with its making charge. Take that price on your zakat date, the day your zakat year completes, which is Imam Abu Hanifa's view. If you pay some weeks later, you still use the zakat-date price. Choosing the higher figure when unsure is the cautious course.
Gold you wear is zakatable in the Hanafi school; see zakat on jewellery you wear. To do the carat maths with live prices, use the zakat on gold calculator.
The evidence
Quran, Surah At-Tawba 9:34
۞ يَٰٓأَيُّهَا ٱلَّذِينَ ءَامَنُوٓا۟ إِنَّ كَثِيرًۭا مِّنَ ٱلْأَحْبَارِ وَٱلرُّهْبَانِ لَيَأْكُلُونَ أَمْوَٰلَ ٱلنَّاسِ بِٱلْبَٰطِلِ وَيَصُدُّونَ عَن سَبِيلِ ٱللَّهِ ۗ وَٱلَّذِينَ يَكْنِزُونَ ٱلذَّهَبَ وَٱلْفِضَّةَ وَلَا يُنفِقُونَهَا فِى سَبِيلِ ٱللَّهِ فَبَشِّرْهُم بِعَذَابٍ أَلِيمٍۢ ﴿٣٤﴾
O you who have believed, indeed many of the scholars and the monks devour the wealth of people unjustly and avert [them] from the way of Allah. And those who hoard gold and silver and spend it not in the way of Allah - give them tidings of a painful punishment.
Gold and silver are named as wealth on which Allah's right is due, whatever was paid for them.
Sunan Abi Dawud 1573
Graded sahih... فإذا كان لك عشرون دينارا وحال عليها الحول ففيها نصف دينار ...
"When you have twenty dinars and a year has passed over them, half a dinar is due on them."
The zakat is a share of the gold itself, one fortieth, so what counts is the gold you hold, not its cost.
Where the ruling is recorded
- al-Hidaya, Kitab al-Zakat, chapter on the zakat of gold. One fortieth of gold is due once it reaches the nisab and a year passes.
- Radd al-Muhtar, Kitab al-Zakat, chapter on the zakat of wealth. Paying the value instead of the gold itself, and the imams' difference over valuing on the due date or the day of payment.
Checked by our team. For a more accurate answer to your own situation, consult a scholar. Quran translation by Sahih International. Hadith Arabic from the standard editions of the six books and the Muwatta, with gradings as recorded there; the English is our own rendering. Spotted a mistake? Tell us.