Buying from a jeweller
Making charges and hallmarks: how they are calculated and how to negotiate them
The making charge is the only negotiable part of a gold price. We explain what it covers, how it is quoted per gram or as a percentage in different markets, what a hallmark is and who strikes it, and how to work out the real making charge in any offer in a minute and negotiate it with numbers.
Making charges and hallmarks: how they are calculated and how to negotiate them
The raw gold price is the same in every shop in town at the same moment; what differs from one shop to the next is the making charge. It is also the part you lose entirely on the day you sell, which makes understanding it the most valuable skill a gold buyer can have. This article explains what a making charge covers, how it is quoted in the Gulf, Egypt, India and the West, what a hallmark is and who strikes it, and how to uncover the real making charge in any offer in a minute and negotiate it.
What a gold price is made of
The price of any piece in a shop = the value of the raw gold + the making charge + the hallmarking fee + tax (where it applies) + the shop's margin. The raw value is the weight × today's gram price for the karat, which you can see live on the home page. Everything after it is the subject of this article.
What the making charge covers
The making charge is the cost of turning a bar into a piece: design, casting, forming, soldering, polishing, stone-setting where there is any, the craftsman's labour, tool wear and a share of the shop's overheads. It varies with three things:
- The type of piece: bars and coins are the lowest, then plain chains and bangles, then rings and earrings, then stone-set and hand-engraved work.
- The weight: very light pieces carry a higher charge per gram because the same work is spread over less metal.
- Where you buy: traditional gold districts charge less than malls, and brands add the price of the name and the design.
How making charges are quoted
Two common ways:
- Per gram: a fixed amount per gram (say SAR 40 or EGP 80 per gram) multiplied by the weight. This is the norm in the Gulf, Egypt and Pakistan.
- As a percentage: a share of the raw gold value (say 8% or 15%), common in India and in branded jewellery worldwide. Its flaw is that it rises automatically whenever the gold price rises, although the work has not changed.
Some Indian jewellers also add a separate wastage charge for metal lost in working; it should appear as its own line. To compare two offers, convert everything into a making charge per gram; that is the number you negotiate.
Usual ranges
| Type of piece | Egypt (EGP/g) | Saudi Arabia and UAE (SAR or AED/g) | India (share of gold value) |
|---|---|---|---|
| Bars and coins | 40–110 | 15–35 | 2–5% |
| Plain chains, bangles, sets | 60–150 | 35–70 | 8–15% |
| Rings, earrings, pendants | 90–220 | 60–110 | 12–25% |
| Stone-set and hand-engraved | 130–320 | 90–160 | 20% and up |
These are approximate ranges for ordinary, non-branded work and vary with the season and the shop; brands and Italian designs can exceed double. In the United States and Europe jewellers rarely quote a separate charge: the ticket price bundles everything, and a 14K or 9ct piece can sell for several times its metal value. The fair price tool carries these ranges and compares any offer with them automatically.
What a hallmark is and who strikes it
A hallmark is the official purity stamp on the piece (750 for 18K, 916 for 22K, 585 for 14K), with the mark of the body that tested it and the maker's or sponsor's mark. In the United Kingdom it is compulsory on gold over 1 gram and struck by one of four Assay Offices under the Hallmarking Act; in India the BIS hallmark with its six-character HUID is mandatory; in Egypt the Stamping and Weights Authority stamps jewellery; in Kuwait and Bahrain state laboratories hallmark every piece; in Saudi Arabia and the UAE trade authorities require a clear karat and test pieces in accredited laboratories; in the United States there is no assay system, and the karat mark is the maker's declaration backed by federal law on accuracy. The hallmarking fee is small (per gram or per piece) and usually folded into the making charge. What a hallmark really does is protect your selling price: a clearly hallmarked piece is bought as scrap at a smaller deduction and without argument about purity.
Tax: on the making charge or on the total?
- Egypt: VAT of 14% on the making charge only, not on the gold value.
- Saudi Arabia: 15% on the full price of jewellery; investment gold of 99% purity or more zero-rated.
- UAE: 5% on the full price; investment gold zero-rated; partial refund for tourists.
- India: 3% GST on the gold plus 5% GST on the making charge.
- United Kingdom: 20% VAT on jewellery; investment gold exempt.
- United States: state sales tax varies; many states exempt bullion.
- Bahrain 10% and Oman 5% on jewellery; Kuwait and Qatar no VAT.
When comparing making charges across countries, add each side's tax to compare the real cost.
How to uncover the real making charge in any offer
- Note today's gram price for your karat (for example $98.19 for 18K today, November 7, 2026).
- Ask for the weight on the shop's scale, and subtract the stones.
- Multiply the weight by the gram price = raw value.
- Subtract the raw value from the asking price and divide by the weight = the real making charge per gram (hallmarking, tax and margin included).
- Compare it with the usual range for the type of piece.
Example in Dubai: a 10 g chain of 22K has a raw value of AED 4,407.40 today; the shop asks AED 450 more. The real making charge is AED 45 per gram, the middle of the range for chains, and 5% VAT remains, most of which a tourist recovers at the airport. Example in India: a 20 g 22K bangle with a raw value of ₹225,404.60 offered at 12% making plus 3% GST on the gold and 5% on the making; the making alone is ₹225,404.60 × 0.12, which per gram is a figure you can take to the next shop.
How to negotiate with numbers
- Do not negotiate the gold price; it is the same everywhere, and a shop that "lowers" it makes it up on the weight or the karat.
- Offer a figure per gram rather than a total: "making at 60 instead of 90" is clearer and easier to accept.
- Compare two shops in the same market before deciding; competition between neighbours is a stronger argument than any speech.
- Choose heavier and simpler if the aim is saving: lower making charge and smaller deduction on resale.
- Ask for an itemised invoice: weight, karat, making per gram, tax. A shop that refuses to itemise is hiding something in the number.
- Remember the making charge is never refunded: every unit you pay in it is a certain loss on the day you sell, so keep it as low as you can.
Common mistakes
- Being impressed by a "discount" on the gold price while the making charge is doubled.
- Paying the gold price on the weight of stones; they must be taken off the scale.
- Buying a very light piece with a high making charge as "savings".
- Accepting a single "all-in" figure per gram without knowing what is gold and what is work.
Frequently asked questions
Is the making charge the same in every shop?
No; it differs between shops, cities and seasons, and it is the only negotiable part of the price.
Do I get the making charge back if I sell to the same shop?
Usually not; some shops offer an exchange with a smaller deduction than a scrap sale, so ask before buying.
What is the difference between hallmarking and the making charge?
Hallmarking is a small official fee for the purity stamp; the making charge is the cost of the work and the larger part. Many shops merge the two into one figure.
How do I know a making charge is fair?
Compute the real charge per gram with the steps above and compare it with the usual range for the type of piece, or enter the offer in the jeweller's offer checker.