Guide · Gold Weights & Calculations
How to Calculate the Price of Gold Jewellery (With Examples)
The price of gold jewellery is: net gold weight × the day's rate for that karat + making charges + tax. In Dubai the tax is 5% VAT on the whole invoice. In India it is 3% GST on the gold value and 5% GST on separately billed making. Anything else on the bill, such as stones or certification, is added on top.
That's the whole formula. The skill is in getting each input right, because shops don't always present them the same way.
First, find the right rate
Use the rate for the karat stamped on the piece, on the day you buy. Right now in Dubai, 22K is ₹11,223.97 (AED 438.75) a gram and 18K is ₹9,189.97 (AED 359.24). Shops follow the daily rates published by the Dubai Gold & Jewellery Group, and these change during the day.
The four live rate cards below are the numbers to start from.
Then take net weight, not gross
Gross weight is everything on the scale: gold, stones, beads, enamel, thread. Net weight is the gold alone. Only net weight should be multiplied by the gold rate. On a plain chain the two are the same. On a kundan necklace they can differ by several grams.
Ask for both figures on the tag and the invoice. Our explainer on gross versus net weight shows how shops arrive at the net figure and where buyers get overcharged.
How do you work out making charges?
Making covers design and labour. In Dubai it's usually quoted as a fixed amount per gram (AED 20 a gram, for instance) or as a percentage of the gold value. Handmade, antique and Polki-style work costs more; machine-made chains cost less. It is negotiable at most Gold Souk shops.
The two quoting styles can give quite different totals for the same piece. Our comparison of percentage and per-gram making charges shows when each one is cheaper.
Add stones and extras separately
Diamonds and coloured stones are priced separately, by carat weight and quality, and should be itemised. Certification fees, if any, also go here. None of these should be charged at the gold rate.
Finally, add tax
In the UAE, 5% VAT applies to the full invoice, including making charges and stones. Overseas tourists aged 18 and over can reclaim part of it at participating stores: 87% of the VAT, minus AED 3.60 per transaction, works out to roughly 4.35% of the pre-VAT price. Our guide to VAT on gold in the UAE has the details, and rules can change, so confirm with the UAE FTA if the amount matters.
Three worked examples
The figures below are illustrative round numbers, not today's prices. Swap in the live rate to get a real estimate.
A pair of plain 22K bangles in Dubai
| Line | Working | Amount |
|---|---|---|
| Gold | 30 g × AED 360 | AED 10,800 |
| Making | 8% of gold value | AED 864 |
| Subtotal | AED 11,664 | |
| VAT 5% | 11,664 × 0.05 | AED 583.20 |
| Total | AED 12,247.20 |
If the buyer is an eligible tourist, the VAT refund comes to about AED 504 (87% of 583.20 is 507.38, minus the AED 3.60 fee). The effective cost drops to roughly AED 11,743.
An 18K diamond pendant
Gross weight 6.20 g, of which diamonds and setting stones account for 0.40 g. Net gold is 5.80 g.
- Gold: 5.80 g × AED 270 (18K, example) = AED 1,566
- Making: AED 45 per gram × 5.80 g = AED 261
- Diamonds: AED 1,900, priced separately on the bill
- Subtotal: AED 3,727
- VAT at 5%: AED 186.35
- Total: AED 3,913.35
Notice what happens if a shop wrongly charges the gross 6.20 g at the gold rate. That's an extra 0.40 g × AED 270 = AED 108 for gold you don't have, plus VAT on it.
The same bangles bought in India
Indian bills apply GST differently. Using a rupee example: gold value ₹2,40,000 and making ₹19,200 billed separately.
- GST on gold at 3%: ₹7,200
- GST on making at 5%: ₹960
- Total: ₹2,67,360
The Indian gold rate already includes import duty, which is why the starting gold value is higher than the Dubai equivalent. To compare the two fairly, follow our walkthrough on converting a Dubai rate into an Indian one.
Working backwards from a quoted total
Sometimes a salesperson gives you one round figure: "This necklace is AED 9,000, final." You can still check it. Divide out the VAT first (9,000 ÷ 1.05 = AED 8,571), then subtract the gold value at today's rate. Whatever is left is the making charge, plus stones if any.
Suppose the necklace has a net weight of 22 g of 22K and the rate is AED 360. The gold is worth AED 7,920. That leaves AED 651 for making, about AED 29.60 a gram, or 8.2% of the gold value. Now you know what you're negotiating over, and you can compare that number with what another shop asks.
The all-in price per gram
Divide the final total by the net weight. For the necklace above, AED 9,000 ÷ 22 g = AED 409 a gram all-in. This single figure is the cleanest way to compare two pieces of similar style across shops, because it captures rate, making and tax in one number. Plain machine-made designs will have a lower all-in figure than handcrafted ones, so compare like with like.
Let the calculator do the arithmetic
Enter the weight, choose the karat and add a making charge, and the calculator below shows the total in AED and INR at today's rate.
| ₹ INR | AED | |
|---|---|---|
| Rate per gram | — | — |
| Gold value | — | — |
| Making charges | — | — |
| VAT (5%) | — | — |
| Estimated total | — | — |
You can also open the full gold price calculator on its own page if you want to save or compare several pieces.
Where jewellery price calculations go wrong
- Using the 24K rate for 22K pieces. It inflates the price by roughly 9%.
- Not asking for the making charge in writing. A verbal "about 10%" can turn into something else at billing.
- Charging VAT twice. VAT is calculated once, on the subtotal. Check the invoice doesn't apply it to an already-taxed figure.
- Pricing stones as gold. Stones should have their own line and price.
- Forgetting the exchange rate. If you pay by an Indian card, the rupee amount depends on the card's conversion rate, not the INR figure on a rate board.
What about selling or exchanging later?
The same formula runs in reverse when you sell. A buyer pays for the pure gold content at their buying rate, minus any deduction. Making charges and VAT are not returned. That's why heavy, low-making pieces hold value better than light, ornate ones. Keep the invoice, because it proves the weight and karat you paid for.
Every line should appear on an itemised tax invoice. If you're not sure what to look for, our guide to reading a Dubai gold invoice walks through a sample line by line. For a broader view of how per-gram prices tie together, see the pillar on the gold price per gram.
Before you pay: a five-line check
- Rate: matches today's board for the stamped karat.
- Weight: net gold weight, shown separately from gross.
- Making: agreed amount, per gram or percentage, in writing.
- Extras: stones and certification itemised separately.
- Tax: 5% VAT on the subtotal, once, with a tax-free tag if you're an eligible tourist.
Written by Sagar Yadav and checked against official sources under our editorial policy. Spotted an error? See our corrections policy.
