Take the VAT out of the price (divide by 1.15), subtract the gold value (weight × today's price per gram for that karat), and what is left is the making charge and the shop's margin. Divide that by the weight and compare the figure across shops: it is the only part that really differs from one shop to the next. Today 21K gold is 430.41 SAR per gram, so a 10 g 21K bracelet holds 4,304.13 SAR of gold, and anything above that before VAT is making charge and margin.
How do I know if a gold shop's price is fair in Saudi Arabia?
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Last updated: Source: metals.dev in Saudi riyals, dollars at the 3.75 peg · World benchmark: LBMA price · How we get our prices
What is in a gold shop's price?
The seller gives you one number, but it has three parts:
- Gold value: the weight × the price per gram for its karat. Today 21K is 430.41 SAR per gram and 18K is 368.93 SAR. This part is about the same in every shop, because it follows the world gold price.
- Making charge and margin (مصنعية, masnaiya): the cost of shaping the piece plus the shop's profit, usually quoted as one figure per gram. More in How do I calculate the gold making charge?.
- 15% VAT: charged on jewellery, on the whole amount (gold + making charge), not on the gold alone. The tax authority is ZATCA.
The sum at the shop counter
- Ask for the weight and the karat, and check them against the hallmark (875 for 21K, 750 for 18K) and the invoice.
- Look up today's price per gram for that karat on today's gold prices.
- Work out the gold value = weight × price per gram.
- If the price includes VAT, divide it by 1.15 to get the price before VAT.
- Subtract the gold value from the price before VAT. What is left is the making charge and margin.
- Divide that by the weight: this is the making charge per gram, the figure to compare between shops.
Or enter the weight, karat and price in the shop-price check and it does every step at today's price.
Worked example at today's price: the same bracelet in two shops
A 10 g 21K bracelet. The first shop charges 30 SAR per gram of making charge, the second 50 SAR (example making charges; the gold prices in the table are today's and update on their own):
| Shop 1 | Shop 2 | |
|---|---|---|
| Asking price incl. VAT | 5,294.74 SAR | 5,524.74 SAR |
| Price before VAT (÷ 1.15) | 4,604.13 SAR | 4,804.13 SAR |
| Gold value (10 × 430.41 SAR) | 4,304.13 SAR | 4,304.13 SAR |
| Making charge and margin | 300 SAR | 500 SAR |
| Making charge per gram | 30 SAR | 50 SAR |
The gold value is the same in both shops. The whole difference is making charge: 200 SAR before VAT, which becomes 230 SAR with VAT (200 × 1.15). That is the part you can compare and negotiate.
What is a "fair" making charge?
There is no official making charge. Asked about gold pricing, the Ministry of Commerce told the Saudi newspaper Okaz (November 2020):
«أن أسعار السلع والخدمات تقدم وفقا لقواعد السوق ومبادئ المنافسة الحرة»
"Prices of goods and services are set according to market rules and the principles of free competition." (our translation)
So each shop sets its own making charge, and comparing is your protection:
- Compare the same kind of piece in the same karat (bracelets with bracelets, 21K with 21K).
- Ask at least two or three shops for the making charge per gram.
- Light, handmade and branded pieces naturally cost more to make; heavy, plain pieces cost less.
- If one shop is clearly higher for the same kind of piece, ask why, or negotiate.
The shop-price tables on Dhahabi use an average making charge for each karat, listed in How we get our prices. It is an estimate to show the direction, not a price any shop has to match.
Ask for an itemised invoice
According to Okaz, the Ministry of Commerce requires gold shops to write the price per gram and the total price of each piece («بضرورة كتابة سعر جرام المشغولات الذهبية والسعر الإجمالي للقطعة الذهبية»), and the invoice must show the karat and the weight of the gold and any stones. That invoice lets you work out the making charge after you leave the shop, and protects you in a dispute. If a price was not shown or the invoice is incomplete, you can report it to the Ministry of Commerce on 1900.
Remember: the making charge does not come back when you sell
When you sell the piece later, a shop pays for the gold by weight and karat. The making charge and VAT you paid are not refunded. Today shops buy used 21K at about 425.41 SAR per gram. So if your goal is saving, a high making charge is a cost you will not recover. See the selling calculator.
A calculator that does this for you
- The free shop-price check on this site separates the VAT, the gold value and the making charge per gram at today's price.
- The Dhahabi iPhone app by SKA has a shop-counter calculator (in Dhahabi Pro) that also rates the price as good, fair or high.
Sources
- Ministry of Commerce, via Okaz: Shops switch to selling gold by the piece, not by weight... Ministry of Commerce: free competition (Arabic, 18 November 2020).
- ZATCA: 15% VAT.
- Ministry of Commerce: complaints on 1900.
Frequently asked questions
Is the shop price the same as the price in gold apps?
No. Apps and sites show the raw gold price per gram (today 430.41 SAR for 21K). A shop adds the making charge, its margin and 15% VAT on jewellery, so its price is always higher.
How do I find the making charge if the shop does not say?
Divide the total by 1.15, then subtract the gold value (weight × price per gram). What is left is the making charge and margin; divide it by the weight for the figure per gram.
Is VAT part of the making charge?
Take the VAT out first, then work out the making charge from the price before VAT. If you skip that step the making charge looks higher than it is, because VAT is charged on the whole amount.
Should I compare the making charge per gram or the total price?
Per gram. The gold price changes during the day and pieces weigh different amounts; the making charge per gram lets you compare pieces of different weights at different times.
Is there an official maximum making charge?
No. The Ministry of Commerce treats prices as free competition, but it requires shops to write the price per gram, the total price, the karat and the weight on the invoice.