The four parts of the price
- The gold value: the day’s price per gram for your karat × the weight
- The making charge (المصنعية): the shop’s charge for craftsmanship, usually per gram
- VAT: 15% of the gold value plus the making charge
- The total: what you pay
From the 24k price to your karat
Shops start from the price of pure 24-karat gold and scale it by purity:
Price per gram = 24k price × karat ÷ 24
| Karat | Pure gold | Share of the 24k price |
|---|---|---|
| 24k | 100% | 24 ÷ 24 = 1 |
| 22k | 91.7% | 22 ÷ 24 |
| 21k | 87.5% | 21 ÷ 24 |
| 18k | 75% | 18 ÷ 24 |
21-karat gold is the most common for jewelry in Saudi Arabia. 18-karat is used for lighter, more detailed designs.
The making charge
The making charge pays for design and craftsmanship. It varies from shop to shop, and more detailed pieces cost more. Because it’s usually quoted per gram, it adds up on heavier pieces, so compare it between shops just as you’d compare the gold price.
VAT on gold
According to the Zakat, Tax and Customs Authority (ZATCA):
- Gold jewelry sold by a VAT-registered seller carries 15% VAT, on the gold value and the making charge together.
- Investment gold of 99% purity or more, as bars or coins, is zero-rated.
Worked example
A 10-gram 21k bracelet, with 24k gold at an example 400 SAR a gram and a making charge of 20 SAR a gram:
- Gold: 400 × 21 ÷ 24 = 350 SAR a gram, × 10 g = 3,500
- Making charge: 20 × 10 g = 200
- VAT: 15% × 3,700 = 555
- Total: 4,255 SAR
When you sell
If you sell the bracelet back as an individual, the shop usually pays the gold value at that day’s price, 3,500 SAR if the price hasn’t changed. You don’t get back the making charge or the VAT. That’s why jewelry works better as something to wear than as an investment, and why people who buy gold to invest usually choose bars.
The gold price calculator works this out for any karat and weight. If you own gold, check whether zakat is due with the zakat calculator.