How is the price of gold jewellery calculated?
The price of any gold piece = (weight × price per gram of its karat) + (weight × making charge per gram) + any tax. The gold value moves daily with the world price, while the making charge is the craftsmanship fee and depends on the design and the shop.
Prices for different karats
The karat shows how many of 24 parts are pure gold, so the price of one karat is worked out from another by ratio:
| Karat | Purity | Hallmark |
|---|---|---|
| 24K | Almost pure gold | 999 |
| 22K | 91.7% | 916 |
| 21K | 87.5% | 875 |
| 18K | 75% | 750 |
| 14K | About 58.5% | 585 |
Example: if 24K gold is 400 per gram, 21K is 400 × 21 ÷ 24 = 350 and 18K is 400 × 18 ÷ 24 = 300.
Why do you lose money selling gold jewellery soon after buying?
When you sell, the shop usually pays only the gold value at its buying price (sometimes minus a small deduction). The making charge and tax you paid don’t come back. That’s why the calculator shows the gold value separately: it’s roughly what you would get back. For saving, bars and gold coins have far lower making charges than jewellery.
Frequently Asked Questions
Is the making charge included in zakat?
No. Zakat is due on the pure gold in the piece only, not the making charge or tax. The calculator shows the pure gold weight; you can then use our zakat calculator.
How is tax on gold charged?
It depends on the country and the type of gold. In Saudi Arabia and the UAE, VAT (15% and 5%) is usually charged on the whole price of jewellery, while high-purity investment bars can be treated differently. In Egypt, shops usually quote the making charge with tax included. If your shop adds tax separately, enter the rate and choose what it applies to.
Why is the shop’s 18K price slightly different from the calculator?
Some shops price each karat separately based on supply and demand, so there can be a small difference from the mathematical ratio. If the shop quotes a price for your piece’s karat, choose that karat under “Karat of that price” and the result will match.
Where do I get today’s gold price?
From a trusted jeweller, or gold price websites and apps for your country. The calculator doesn’t fetch prices automatically, so you calculate with the price your shop actually uses.