Quick answer
A gold jewellery price breaks down into four parts: the gold's spot value adjusted for karat purity, making charges (typically 8–25% of gold value), tax (GST/VAT) on top of both, and an optional old-gold exchange credit if you're trading in. Comparing your jeweller's making-charge percentage against this breakdown is the single biggest lever for avoiding an overpriced quote.
Two jewellers quoting the "same" gold rate can hand you very different final bills for an identical piece — and the gap is almost never the metal itself. It's making charges, and sometimes tax treatment, that actually varies between shops.
The four components of a jewellery price
What you're actually paying for
| Component | Typical range | Who sets it |
|---|---|---|
| Gold value (purity-adjusted) | Set by live international spot price | The market — not negotiable per jeweller |
| Making charges | 8–25% of gold value, or a flat rate per gram | Each jeweller individually |
| GST / VAT | Local tax rate, applied on metal + making charges | Government — fixed by law |
| Old-gold exchange credit | 90–98% of fresh spot value | Each jeweller's buyback policy |
Formula used:
Final Price = (Gold Spot Price × Weight × Karat Purity) + Making Charges + Tax − Old-Gold Exchange Credit
Why purity matters before you even look at making charges
Spot price is quoted for 24-karat (99.9% pure) gold, but most everyday jewellery is 22K (91.67%) or 18K (75%) — too soft at 24K to hold its shape. Make sure any quote you're comparing has already adjusted for the actual karat of the piece, not the 24K spot rate, before you judge whether the making-charge percentage on top is fair.
How to check a quote yourself
- Look up today's live gold rate on the metals & commodities converter
- Multiply by the piece's weight and karat purity to get the raw gold value
- Subtract that from the jeweller's quoted price before tax — the remainder is their making charge
- Divide that making charge by the gold value to get the making-charge percentage, and compare it against the 8–25% typical range
Or skip the manual arithmetic entirely: the Gold & Jewellery Calculator runs this full breakdown — gold value, making charges, GST/VAT, and an old-gold exchange credit — against live gold rates, by karat and weight unit, in one pass.
Old-gold exchange: why the credit is never 100%
Trading in old jewellery toward a new piece almost never credits the fresh spot value in full — jewellers typically credit 90–98% of it, to cover re-refining losses, wastage, and the cost of verifying purity on something they didn't sell you originally. A buyback percentage below that range is worth questioning.
For educational and informational purposes only — not financial, investment, trading, legal or tax advice. See our full Financial Disclaimer.