Making charge per gram versus percentage: which actually costs more

A making charge is the part of a quote that pays for the bench work rather than the metal. Jewellers express it in two ways, and the two ways behave completely differently when the gold rate moves. One is a flat rate per gram. The other is a percentage of the gold value.

The difference sounds academic until you put the same ring through both.

The two methods

Per gram. A fixed rupee figure for each gram of finished gold weight. The number is stated once and does not move when gold moves. To check it, multiply the rate by the net weight.

Percentage. A stated share of the gold value, calculated after the metal is priced. When gold rises, this charge rises with it, even though the hours at the bench are identical. A percentage quote often reads as a smaller number than it is, because the customer is looking at a percentage rather than rupees.

The same ring, priced both ways

A 5.5 gram 18K ring. Gold at ₹11,210 per gram is ₹61,654. The columns below show what four common percentage rates would charge for the same bench work, against our flat ₹1,800 per gram.

Read the effective-per-gram column. A jeweller quoting 20 per cent is charging ₹2,242 for every gram of bench work, which is 25 per cent above the flat rate. The percentage looked modest; the rupee figure is not.

Why the percentage method drifts

The work is the same whether gold costs ₹14,000 a gram or ₹18,000 a gram. The file, the solder, the setting and the polish take the same hours. Under a per gram charge, the labour figure stays put and only the metal line moves. Under a percentage charge, both lines move together, so a rising market quietly increases the labour cost as well.

That is the structural criticism of percentage pricing, and it is fair. The counter argument is that a percentage quote is simpler to write. It is. It is also harder to audit, because the customer has to compute the gold value before they can see what the labour actually cost.

What a per gram rate does not guarantee

A flat rate can hide a thin piece. If the weight is low, the total making charge is low even at a high per gram rate, and the piece may have less metal under the settings than it should. The per gram rate is only meaningful alongside the net gold weight and the karat.

Heavy hand work also commands more. A cast band and a hand-pierced gallery do not cost the same to make, and a workshop that charges one rate for both is either overcharging the simple piece or undercharging the complex one. Our rate is single and stated; where a piece needs materially more bench time, we say so on the estimate rather than adjusting the rate silently.

How to compare two making charges

Four questions settle it. What is the net gold weight, excluding stones? What karat? Is the making charge per gram or a percentage, and what is the exact figure? And is GST applied to the total or only to part of it? Answer those four and the two quotes sit side by side without ambiguity.

An itemised estimate gives you all four lines and the total, so the comparison takes a minute rather than an argument.

Frequently asked

Is a percentage making charge always worse?

Not always, but it is less predictable. In a rising gold market a percentage charge increases even though the labour does not. A per gram charge keeps the labour figure fixed and leaves only the metal to move.

What is a normal making charge in Mumbai?

Simple cast pieces commonly sit at ₹1,200 to ₹2,000 per gram. Hand-finished and stone-set work runs higher. A percentage quote of 15 per cent on an 18K piece is often equivalent to ₹1,500 to ₹2,500 per gram, so the two formats are comparable once converted.

Does GST apply to the making charge?

Yes. GST at 3 per cent is charged on the total of gold, stones and making, not on the metal alone. Any quote that applies it to only one line is understating the tax.