Is the Nisab for Zakah in Canada Based on Gold Only, and Why Is 21K Gold Used?
Question
Salam Imam, is the nisab for zakah based on gold and not silver today, since cash is no longer backed by silver? And is the correct gold standard 21K gold rather than 24K or 14K? How is this determined in today’s market?
Answer
Alhamdulillah, wassalatu wassalamu ala rasulillah, wa ala alihi wa sahbihi ajmain.
This question touches on an important contemporary application of zakah law: how nisab is determined in a modern monetary system, and which standard most accurately reflects the intent of Sharia today.
1. The Shar‘i Basis of Nisab
The Prophet established nisab using gold and silver, because these were the monetary standards in circulation at that time.
Classically:
- Gold nisab was set at 20 dinars, approximately 85–87 grams of gold
- Silver nisab was set at 200 dirhams, approximately 595–612 grams of silver
These metals were not chosen arbitrarily; they were chosen because they represented real purchasing power and wealth in society.
2. Why Silver Nisab Is No Longer Applied Today
In the classical system:
- Silver functioned as real money
- Its value reflected normal purchasing power
In the modern world:
- Cash is no longer backed by silver
- Silver has lost its historical monetary function
- The price of silver today is artificially low compared to its role in the Prophetic era
Applying silver nisab today results in a nisab that is extremely low, making zakah obligatory on people who are not genuinely wealthy, which contradicts the maqasid of zakah.
For this reason, many contemporary jurists hold that silver nisab is no longer representative of wealth, and that gold is the correct and applicable standard for determining nisab in modern economies.
3. Why 21K Gold Is Used Instead of 24K or 14K
While classical texts refer to pure gold, Sharia does not require theoretical purity divorced from market reality.
In most western societies and global markets today:
- 21K gold is the most commonly traded, recognized, and used standard
- It represents the customary gold value used for pricing, savings, and jewelry
- It reflects real purchasing power more accurately than laboratory-pure 24K gold, which is rarely used in daily transactions
Thus, nisab is calculated using:
- The weight of gold set by the Sunnah
- The customary gold standard used in the market, which is 21K
4. Using Local Market Gold Prices
Zakah is calculated based on:
- The local currency
- The local gold market
Therefore, in Canada:
- You use the Canadian market price of 21K gold
- You multiply that price by approximately 85–87 grams
- That amount becomes the nisab threshold in Canadian dollars
This explains why nisab figures change year to year and why different numbers circulate online.
5. Relevant Usul Principles
العادة محكمة
Custom is legally authoritative.
This principle means that Sharia recognizes prevailing economic realities when applying rulings tied to value and measurement.
المعروف عرفًا كالمشروط نصًا
What is established by custom is treated as if it were explicitly stipulated.
Since 21K gold is the commonly recognized and relied-upon gold standard in today’s markets, it is treated as the operative reference for nisab.
These principles justify relying on gold (not silver) and 21K gold (not laboratory purity) in modern zakah calculations.
Final Ruling
In today’s monetary system, nisab for zakah is correctly based on gold, not silver, because cash is no longer tied to silver and silver no longer represents real wealth.
The applicable gold standard is 21K gold, as it is the most commonly used and recognized form of gold in modern markets.
Zakah becomes obligatory when a person’s zakatable wealth reaches the gold nisab (approximately 85 grams of gold) valued according to the current Canadian market price of 21K gold which is approximately 15000 CAD. according to Goldrate Magazine.
This approach is sound in fiqh, aligned with contemporary economic reality, and supported by established usul principles.
And Allah knows best.