Academy · Foundation
How making charges and wastage actually work
Making charges are the fee for turning metal into a piece. Wastage is a second, separate charge for metal the maker says was lost while doing it. They are calculated in different units — making on value, wastage on weight — so they stack, and quoting one without the other tells you almost nothing.
The trap is not the size of the charge. It is the base. "Ten per cent making" can mean ten per cent of three different numbers, and the shop is not obliged to volunteer which. Two jewellers quoting the identical percentage can hand you bills that differ by thousands of rupees on the same necklace.
This lesson shows you the three models, works one real comparison through to the end, and leaves you with a single number you can carry between shops.
The three ways making is charged
- Per gram. A flat rupee amount for every gram — say ₹700 per gram. Easy to compare, and the most transparent of the three. Ask which weight it applies to.
- Percentage. A percentage of the gold value. This is the common one, and the one that hides things, because the percentage needs a base and there are at least three candidates.
- Per piece. A flat fee for the item regardless of weight. Usual for machine-made chains and light items; rare on heavy handmade work.
Gross weight, net weight, and why the difference is expensive
Any stone-set piece has two weights. Gross weight is the whole item on the scale — gold, stones, any filling. Net weight is the gold alone, after the stones are deducted.
You should be paying gold rate on net weight. But a percentage making charge applied to gross weight quietly bills you making on the stones as well as the gold. On a piece where stones are a fifth of the weight, that single choice moves the bill by more than most people negotiate on.
The stones themselves are then priced separately, and that is a different conversation with its own margins. Get the weights split before it starts.
Wastage: what it was, and what it is now
Wastage — vaya in much of India — has a real origin. Handmaking a piece genuinely loses metal: filing, drawing, soldering, polishing all take some away. Charging for it made sense when it was gone for good.
Two things changed. Casting and CAD-led manufacture lose far less than traditional handwork. And the sweepings, filings and polishing dust are collected and refined back into metal, which the workshop keeps. Where wastage is still charged at traditional percentages, it is increasingly a margin line rather than a physical loss — which is not dishonest, but is worth knowing when you are told it is unavoidable.
Mechanically, wastage is added to the weight you pay for. Eight per cent wastage on a 10-gram piece means you buy 10.8 grams of gold and go home with 10.
The same 10%, three different bills
A 22-karat necklace. Gross weight 25.0 g, of which stones account for 3.0 g, so net gold is 22.0 g. Gold at ₹9,850 per gram for 22k.
Illustrative figures, chosen to show the mechanism. Do the same arithmetic with the day's real rate.
- Shop A — "10% making", charged on net gold value.
- Shop B — "10% making", charged on gross weight value.
- Shop C — "only ₹850 per gram making", plus 6% wastage.
The arithmetic, in full
Net gold value is 22.0 g × ₹9,850 = ₹216,700. Gross weight value is 25.0 g × ₹9,850 = ₹246,250.
- Shop A. Making = 10% of ₹216,700 = ₹21,670. Total ₹216,700 + ₹21,670 = ₹238,370.
- Shop B. Making = 10% of ₹246,250 = ₹24,625. Total ₹216,700 + ₹24,625 = ₹241,325. The same percentage, ₹2,955 more, entirely because of the base.
- Shop C. Wastage of 6% on 22.0 g adds 1.32 g, so metal is charged on 23.32 g = ₹229,702. Making = ₹850 × 22.0 = ₹18,700. Total ₹248,402.
Cheapest to dearest is ₹10,032 — about 4.6% of the metal value — on a piece where every quote sounded reasonable. Stones, hallmarking fee and tax sit on top of all three and do not change the ranking.
The one number to carry
Divide the total by the net gold weight. That gives you rupees per gram of gold actually received, which is the only figure that compares across shops, models and karats.
- Shop A — ₹238,370 ÷ 22.0 g = ₹10,835 per gram · 10.0% over metal
- Shop B — ₹241,325 ÷ 22.0 g = ₹10,969 per gram · 11.4% over metal
- Shop C — ₹248,402 ÷ 22.0 g = ₹11,291 per gram · 14.6% over metal
Write those three figures down in the shop. A quote you cannot reduce to one is a quote you have not understood yet.
What else lands on the bill
A hallmarking charge per article is normal and small — it is the fee the assaying and hallmarking centre charges, passed on. Stone value is separate and is where a second set of margins lives. Tax is added at the end.
On tax, the thing to insist on is not a rate but a breakdown: the bill should show metal, making, stones, hallmarking and tax as separate lines, and show which base each percentage was applied to. Treatment of making charges for tax has been read more than one way, and rates change — so check the current position for your state with your own accountant rather than accepting whatever the software printed.
What this lesson cannot tell you
It cannot tell you whether a making charge is fair. A hand-engraved piece that took a craftsman three weeks and a cast chain from a machine can carry the same percentage, and only one of them earned it. This lesson gives you the arithmetic, not the judgement — the judgement comes from seeing enough work to know what skill looks like.
It also assumes the gold is what the shop says it is. Purity is a separate question with separate tests, and no amount of price arithmetic protects you from a piece that is 18 karat sold as 22. That is Lesson 03.
Kept in this browser only — no account, and nothing is sent anywhere. Finish all eight and you can claim a certificate.
Educational content only. Not financial, investment or tax advice. Aurix does not buy, sell, store or broker metal, and does not quote executable prices.