Is the Nisab for Paper Money Based on Silver or Gold?

Question

My gold is below the gold nisab, but my cash reaches the silver nisab. Should I give zakat on my cash only?

Short Summary

If your cash reaches the silver nisab (595 g of silver), zakat becomes due on all your zakatable assets combined  including gold, even if it is below the gold nisab.

Key Points

• Cash is assessed using the silver nisab (595 g) for the benefit of the poor.

• Once nisab is reached, all zakatable assets are combined.

• Zakat rate: 2.5% on the total amount after one lunar year.

Detailed Answer

Zakat becomes obligatory when a person’s wealth reaches the nisab (minimum threshold) and a full Hijri year passes over it.

1. Basis for Nisab in Cash

The stronger scholarly view is that paper currency should be assessed using the silver nisab, not gold. This is because silver’s nisab is lower, allowing zakat to reach more poor people. The silver nisab equals the value of 595 grams of silver.

2. Scholarly Precedent

Classical jurists stated:

“Trade goods are to be evaluated at the end of the Hijri year on the basis of what is in the best interests of the poor… If their value reaches the minimum threshold according to one of the two [gold or silver] and not the other, that is what should be regarded as the minimum threshold.”
(Ar-Rawd al-Murbiʿ, p. 211)

3. Contemporary Fatwas

The Fiqh Council of the Muslim World League, the Council of Senior Scholars, the Permanent Committee, and Shaykh Ibn Bāz all ruled that paper currency is measured against the lower nisab almost always silver.

Shaykh Ibn Bāz said:

“Zakah must be paid on paper money if its value reaches the lower of the minimum thresholds of gold or silver, or if it reaches the minimum threshold when put together with other wealth [gold, silver, trade goods].”
(Majmūʿ Fatāwa Ibn Bāz, 14/125)

The Permanent Committee stated:

“The nisab for zakat in currency equals the value of 20 mithqals of gold or 140 mithqals of silver, whichever is more beneficial to the poor.”
(Fatāwa al-Lajnah ad-Dā’imah, 9/257)

Practical Ruling

If your cash alone reaches the silver nisab, you must:

1. Add the value of your gold (even if below gold nisab).

2. Combine them to form your total zakatable wealth.

3. Pay 2.5% zakat on the total amount.

What This Means for You

Even if your gold is under the gold nisab, if your cash reaches the silver nisab, you calculate zakat on your entire zakatable wealth combined.

And Allah Knows Best

References

Primary Sources:

• Ar-Rawd al-Murbiʿ, p. 211

• Fatāwa al-Lajnah ad-Dā’imah, 9/257

Secondary Sources:

• Majmūʿ Fatāwa Ibn Bāz, 14/125

• Al-Qarar 6, p. 101 – Fiqh Council of the Muslim World League