This makes five uqiyyah the standard of nisab, the minimum threshold, for Zakat on money. The Prophet, on him be peace, said: “There is no sadaqah on anything less than five uqiyyah” (Muslim, Ahmad). Again, sadaqah here means Zakat (see blogpost The Difference Between Zakat and Sadaqah).
Zakat on money includes both principal and profit from it, whether or not it brings yield or grows. Its Zakat rate is low compared to crops and agricultural produce to encourage investment and discourage hoarding, which Islam is dead against.
Regarding gold, there is virtual consensus (ijma‘) among the scholars based on a conglomerate of reports taken together and the statements and practice of the Companions that 20 gold dinars equalled the value of 200 silver dirhams and formed the minimum threshold (nisab) for Zakat on gold, paid at the Zakat rate of half a gold dinar on 20 gold dinars. Other reports establish that one gold dinar equalled the value of 10 silver dirhams at the time of the Prophet, on him be peace.
Why Is Zakat on Money Today Paid Based on Gold?
Weight determined the value of the silver dirham and gold dinar as currency in the time of the Prophet, on him be peace. So, weight remains the method of measuring our currency for Zakat payments.
The Prophet’s establishment, on him be peace, of the weights of Makkah as our standard measure for currency — based on the weights of the dirham and dinar of the Makkans, renown traders in the Indian Ocean world — and the measures of Madinah, a thriving agricultural oasis, as our volume measures for crops and produce, remains in force in perpetuity for calculating Zakat nisab thresholds and payments.
Muslims have long converted to gold as the standard weight measure for the Zakat nisab threshold on currency because its coinage has proven the most constant stable measure of wealth.
Are our measures today the same as the Prophet’s, on him be peace?
Extant samples of coinage, singularly called mithqal and the exact equivalent of the gold dinar at the time of the first generation of Muslims, made it possible to match our currency weights to the prophetic standard.
Many historians, including Ibn Khaldun in his justly celebrated Al-Muqaddimah, established that 10 silver dirhams equalled the weight of seven gold dinars, or mithqals. “It is unanimously agreed upon since the early ages of Islam, the era of the Companins and the Successors, that … the weight of a silver dirham is equal to seven-tenths the weight of a gold dinar.” The great Companion ‘Umar ibn Al-Khattab, himself, standardized the legal weight of the dirham. Later, Caliph ‘Abdul-Malik standardized all coins of the realm on that legal weight.
The standard gold dinar minted by the Caliph ‘Abdul-Malik (whom scholars, Muslims and others, early and modern, unanimously agree did not change the weights of Makkan gold coins) weighed exactly 4.25 grams. That makes the standard dirham seven-tenths of that weight, or 2.975 grams. This gold dinar weight, it turns out, is also the precise weight of the Byzantine dinar.
This puts the nisab weight of silver dirhams at 200 x 2.975 gm, or 595 grams. That means the nisab weight of gold is 20 dinars x 4.25 gm, or 85 grams. As stated, Muslims converted the standard measure for nisab on currency to gold because it is a far more stable measure than silver of actual wealth. Had silver been used as the standard for nisab, it would force the poor to pay Zakat, putting them under great financial duress. As this is written, nisab for currency based on silver prices today would be $345.1, hardly a substantial threshold of wealth. Based on its agreed upon gold standard, nisab at this writing is actually $4,242.35, a juster wealth measure.
What is the basis of Zakat’s volume measures today?
In our times, the US meausre of capacity for dry goods is based on the bushel. At the time of the Prophet, on him be peace, the volume measures of the farmers of Madinah, the Ansar, were based on a measure of capacity for dry goods called a sa‘. That is not to say, the sa‘ and the bushel are equal. This is just to establish the standard unit of dry good volume measure in Madinah at the time of the Prophet, on him be peace, so we can determine the nisab threshold of grain and foodstuffs. (The sa‘ is also used for kaffarah, or atonement, payments for broken oaths and pilgrimage mistakes.)
The Madinan sa‘ measured four double-handfuls of a typical man. The sa‘ is a measure of capacity, that is, volume, but its weight in grain or pulses (like lentils, beans, etc.) is five and one-third Madinan ratls.
A wasq is 60 sa‘s. The Prophet, on him be peace, said: “No sadaqah is obligatory on anythng less than five wasqs.” Again, ‘sadaqah’ at the time of the Prophet, on him be peace, and in the Quran’s Revelation means Zakat. So five wasqs, or 300 sa‘s, is the nisab threshold for Zakat on dry goods.
Here is a table of the volume measures in the agricultrual system in general use among the Madinans at the time of the Prophet, on him be peace, based on the sa‘ unit of measure. The last item in the table is a conversion to the Madinan weight measure, the ratl.