How Jewellery Price Is Calculated, Step by Step

A jewellery price can feel like a single number handed to you at the counter. It is really the total of several parts, each of which you can check. Once you see the structure, comparing pieces and shops gets much easier.

Step 1: the gold value

The gold value is the weight of gold in the piece multiplied by the gold rate for its purity. Two details matter:

• Net weight: the weight of the metal alone, not counting stones or other parts. Gross weight includes stones and anything else attached, so make sure the bill uses the right figure for each part of the calculation.
• The rate: gold is priced per gram at a rate that moves with the market through the day. For 18K, the rate is lower than for 24K, in proportion to purity.

For example, if a ring has 4 grams of 18K gold and the rate for 18K gold that day is a certain amount per gram, the gold value is 4 times that amount.

Step 2: making charges

Making charges pay for the craftsmanship. They are quoted per gram or as a percentage of the gold value. We explain both in gold making charges explained.

Step 3: wastage, if charged

Some jewellers charge for metal lost in production, others include it in making. See what wastage is in gold jewellery. It should appear clearly if it is charged separately.

Step 4: the stones

Diamonds and gemstones are priced separately from the gold, according to their size, quality and certification. For diamonds, the 4Cs (cut, colour, clarity and carat) drive the price, as covered in the first-time buyer's guide to the 4Cs. In jewellery with several small stones, the total weight and the quality of the group are used.

Step 5: tax

GST is then added to each part at its applicable rate. GST on gold and diamond jewellery, explained goes through the common rates.

A simple worked example

Take a pendant with these illustrative figures: gold value 20,000 rupees, making charge 2,000 rupees and stone value 15,000 rupees. The pre-tax subtotal is 37,000 rupees. Tax is then calculated on each part, and the total payable is the subtotal plus that tax. These numbers are only to show the order of steps, not real prices.

Why the same design can cost different amounts

• The gold rate used changes through the day.
• Net weight differs between pieces of a similar design.
• Stone quality can differ even when stones look alike to the eye.
• Making charges depend on the jeweller and the finish.

How to check any quote

1. Ask for net weight, purity and the rate used.
2. Ask for the making charge as a rupee figure.
3. Ask for stone details and any certificate.
4. Check that tax is itemised.
5. Compare totals for pieces with the same weight and similar stones.

Prices that update with the gold rate

On our site the price of each piece is calculated live against the day's rate, and the parts are shown so you can follow the arithmetic. Open any pendant and look at the breakup. If you want a person to explain a quote, book a visit.