Zakah is obligatory like salah (Prayer). It is obligatory on those who have the nisab. Muslims should calculate carefully all their wealth. After deducting their personal and family expenses, they must give zakah on whatever is left. The ratio of zakah on cash, gold, and silver is a minimum of 2.5 percent. The personal belongings such as residential home, car, clothes, furniture, computer, and books are exempt from zakah.
Sheikh Ahmad Kutty, a senior lecturer and Islamic scholar at the Islamic Institute of Toronto, Ontario, Canada, states: The nisab for gold jewelry is 85 grams; it is the same for cash. So if you have in your possession 85 grams or more of gold jewelry (18 carat), you should pay zakah on it unless you normally wear the jewelry. If you wear it, then you don’t need to give zakah; but it is still considered highly recommended for you to give something as charity if you are not giving zakah on it.
If, on the other hand, you do not wear the jewelry at all, but rather you are keeping it as a saving, then you ought to pay zakah on it at the rate of 2.5 percent of its estimated value. The way to go about it is this: Every year you ought to get the jewelry appraised and estimated, and thus you must calculate the exact amount of zakah due on it, at the rate of 2.5 percent.
The nisab for cash is the nisab for gold according to the preferred view of scholars, so you are eligible to give zakah if you have in your possession cash of 1,700 Canadian dollars or more. This is the estimated value of 85 grams of gold according to today’s market value.