How the gold price is worked out
Gold is priced by the weight of pure gold it contains. Markets quote the price of 24K gold (99.9% pure). Lower karats contain less gold, so their price is the 24K price scaled down by karat ÷ 24. Then the jeweller adds making charges, and in some countries tax.
The calculator never fetches a live rate. Gold prices move through the day and differ by city, so type the rate your jeweller, the local sarafa association or a bank shows today.
Tola, masha and ratti
In Pakistan, India and much of the Gulf, jewellers still weigh gold in tola. A tola is 180 grains, which is 11.6638 grams.
| Unit | In grams | In smaller units |
|---|---|---|
| 1 tola | 11.6638 g | 12 masha |
| 1 masha | 0.9720 g | 8 ratti |
| 1 ratti | 0.1215 g | about 121.5 mg |
| 10 grams | 10 g | 0.857 tola (10 masha 2.3 ratti) |
| 1 troy ounce | 31.1035 g | 2.667 tola |
International prices are given per troy ounce, which is heavier than the ordinary ounce used for food (28.35 g). If you convert a dollar price per ounce, make sure it is the troy ounce. Gem sellers sometimes use a larger “pakki” ratti, so check which one is meant for stones.
Karat and purity
| Karat | Purity | Hallmark | Common use |
|---|---|---|---|
| 24K | 99.9% | 999 | Bars, coins, the quoted rate |
| 22K | 91.67% | 916 | Most jewellery in Pakistan and India |
| 21K | 87.5% | 875 | Popular in the UAE, Saudi Arabia and Egypt |
| 18K | 75% | 750 | Stone-set and diamond jewellery |
Ask for the hallmark or a purity test certificate. A piece sold as 22K but tested at 20K is worth about 9% less in gold.
Worked example: a Pakistani gold set
You buy a set weighing 1 tola 4 masha of 22K gold. The 24K rate is Rs 400,000 per tola and the making charge is 8%.
- Weight: 1 tola + 4 masha = 1.333 tola (15.55 g).
- 22K price per tola: 400,000 × 22 ÷ 24 = Rs 366,667.
- Gold value: 1.333 × 366,667 = Rs 488,889.
- Making charges: 8% × 488,889 = Rs 39,111.
- Total: Rs 528,000 before any tax.
Worked example: buying in Dubai
You buy a 20 g chain in 22K gold. The 24K rate is AED 420 per gram, making is AED 30 per gram, and 5% VAT is added to the whole bill.
- 22K price per gram: 420 × 22 ÷ 24 = AED 385.
- Gold value: 20 × 385 = AED 7,700. Making: 20 × 30 = AED 600.
- VAT: 5% × 8,300 = AED 415.
- Total: AED 8,715.
These rates are examples only. Use the prices on the day you buy.
Making charges and tax
Making charges (banwai or mazdoori) are the jeweller’s fee for the work. They range from a few percent for plain bangles to 20% or more for detailed handwork. Some shops quote a rate per gram or per tola instead, and the calculator handles all three forms.
Tax depends on where you buy:
- Pakistan: the Sales Tax Act lists locally made jewellery at a reduced rate of 3% (Eighth Schedule, as updated to 2025-26). Many small shops quote prices that already include it, so ask.
- UAE: 5% VAT is normally charged on jewellery. Tourists can claim part of it back when they leave the country.
- Saudi Arabia: VAT is 15%.
- Investment gold bars and coins of 99% purity or more are zero-rated for VAT in both the UAE and Saudi Arabia.
Tax rules change, so treat the tax box as your own input and check the receipt.
Selling old gold
When you sell or exchange jewellery, the jeweller pays for the gold only. Making charges are lost, and most shops also deduct a share for impurities, solder and wear. This deduction is often called kaat. Open Selling old gold? under the result and enter the deduction to estimate what you will be paid.
Tips
- Compare shops by the total price per gram of 22K, including making. A low making charge can hide a higher gold rate.
- Keep the bill. It shows the weight, karat and rate, which helps when you sell later.
- Gold you own counts towards zakat. The zakat calculator uses the same tola and karat rules.
- To convert other weights, such as seer and maund, use the weight converter. For a quick price change, try the percentage calculator.