How to Price Gold Jewelry: Daily Rate Plus Making Charge

To price gold jewelry in a shop, use one formula: price = gold weight × today's rate per gram for its karat + making charge. The making charge is either a rate per gram or a fixed amount per piece, and any stones are priced separately. The arithmetic is simple. The real work is making sure every salesperson applies it the same way, at the same daily rate, with the same limit on discounts.

TL;DR. Set the price of one karat each morning and derive the others from purity ratios instead of typing each by hand. Decide per product line whether the making charge is per gram or per piece, and print it on the tag. Price pieces with stones on gold weight only, plus the stone. Give every piece a minimum selling price that only the owner can override. Show the gold value and the making charge as separate lines on the invoice.

What goes into the price of a piece

Before calculating anything, know where each figure comes from. If any of them depends on "whoever is at the counter", prices will differ between two salespeople in the same shop.

Component	Where it comes from	When it changes
Gold weight	The scale, printed on the tag	Fixed per piece
Karat	The hallmark	Fixed per piece
Rate per gram for that karat	The shop's price for the day	Daily, or when the market moves
Making charge	Shop policy for the product line	Only when policy changes
Stones	Their cost plus your margin	Fixed per piece
Tax, where it applies	The tax rules for your business	By law; ask your accountant

Only one of these moves every day: the rate per gram. If everything else is stored on the tag or in your system, pricing a piece becomes a lookup rather than a calculation.

One rate in the morning, the rest by purity

Many shops chalk up separate prices for 21, 18 and 24 carat each morning. That invites errors: someone updates one karat and forgets another, or rounds differently.

It is more reliable to set one karat and derive the rest from the ratio of their purities. Purity, or millesimal fineness, is the number of parts of gold per thousand: 21 carat is 21 ÷ 24 × 1,000 = 875, and 18 carat is 750. So if the 21-carat rate is R, the 18-carat rate is R × 750 ÷ 875.

Settle one question in writing: is 24 carat treated as 1,000 or 999.9? The World Gold Council points out that gold can only be refined to 999.9 parts per thousand in practice, so the choice affects every derived price slightly. The same ratio that converts weight between karats converts price, as our gold karat conversion guide shows with worked examples.

Making charge per gram or per piece?

This choice is often made by habit rather than by numbers. Both are valid; each suits a different kind of work.

	Per gram	Fixed per piece
How it is calculated	Weight × a set rate per gram	One amount printed on the tag
Suits	Chains, bangles, heavier pieces	Light rings, earrings, fine detailed work
Strength	Scales fairly with weight	Delicate work is not underpriced for being light
Weakness	A light, intricate piece earns less than its labour	Needs review when workshop costs change

The practical rule: the making charge on any piece must be higher than what you paid the workshop for it. The gap is your making-charge margin, and how to keep it visible in your books is covered in workshop and making charge accounts.

Pieces with stones

A piece set with stones has two weights: gross weight on the scale, and gold weight without the stones. The gold value is calculated on gold weight alone, and the stone is priced separately. Charge the gross weight at the gold rate and the customer pays gold prices for a stone. If they ever sell it back, they will notice, and their trust is what you lose.

Record both weights and the stone price on the tag the day the piece arrives. It saves arithmetic at the counter and prevents arguments months later. What belongs on a tag is covered in jewellery barcode tags.

Pricing a piece at the counter, step by step

1. Scan or read the tag for weight and karat. Reweigh only if something looks wrong.
2. Take today's rate for that karat from the price set in the morning, not from someone's phone.
3. Calculate the gold value: gold weight × rate.
4. Add the making charge using the method on the tag: per gram or per piece.
5. Add the stone price if there is one.
6. Check against the minimum price. If the customer's requested discount goes below it, the owner decides.
7. Print the invoice, with gold value and making charge on separate lines.

An illustrative price, and where discounts stop

These are round illustrative numbers, not market prices.

An 18-carat ring with a gold weight of 6 g, a fixed making charge of EGP 900, and a stone priced at EGP 1,500. The illustrative 21-carat rate is EGP 3,500, so the 18-carat rate is 3,500 × 750 ÷ 875 = EGP 3,000.

• Gold value: 6 × 3,000 = EGP 18,000.
• Making charge: EGP 900.
• Stone: EGP 1,500.
• Selling price: EGP 20,400.

Say the workshop charged EGP 500 for the ring and the stone cost you EGP 1,100. Replacing this piece at today's rate costs 18,000 + 500 + 1,100 = EGP 19,600. That is the floor: below it you are selling under replacement cost. The room a salesperson can give on their own is the EGP 800 between floor and price, and anything beyond that is an owner decision.

Note that the discount comes out of making charge and stone margin, never the gold value. A salesperson who offers "a discount per gram" is giving away gold at a rate you cannot buy it back at.

Once the price is set, it has to reach the slip intact, with net weight, gram price and making charge on separate lines; our guide to the jewelry invoice lists every field.

How Tibr handles this

According to the Tibr product page, gold pricing is live: change the price of one karat and the others adjust by international purity ratios, so sales always use the day's rate. The system calculates karat and making charge, and barcode sales place each piece on the invoice with its weight and karat. Selling at a loss requires an owner PIN, so a discount below cost cannot pass without the owner knowing.

If you are comparing systems, start with our guide to gold shop management software, or try pricing on demo data from the sign-up page.

FAQ

How is the making charge on gold jewelry calculated?

Either as a fixed rate per gram multiplied by the piece's gold weight, or as a fixed amount for the whole piece printed on the tag. A shop chooses per product line. What matters is that the method is written down and every salesperson applies it the same way.

Do customers get the making charge back when they sell gold to a shop?

Usually not. A shop buying used gold values it by gold weight and karat at the buying rate. That is why showing gold value and making charge separately on the sales invoice is clearer: the customer knows from the start what they paid for metal and what for work.

Is a per-gram or per-piece making charge better?

Per gram suits heavier pieces like bangles and chains; per piece suits light pieces with fine work. Many shops use both, depending on the product line.

How often should a shop update its gold prices?

At least every morning, and again whenever the market moves noticeably during the day. Update one karat and derive the others from purity ratios so all karats stay consistent with each other.

Is tax charged on the gold value or the making charge?

That depends on the tax rules in force and how your business is set up, so ask your accountant. Either way, keep gold value and making charge on separate invoice lines so any tax treatment applies to the right item.

Written by Mindshift Team, Tibr product team.

Want today's rate updated once and applied to every piece at every counter? See Tibr on its official page.