Buyer's Premium & Auction Costs
What the buyer pays, and what the seller keeps.
£13,120
on a £10,000 hammer
The sale itself takes 45.6% of the hammer price.
Rates differ by house, by sale and by band, and some lots carry additional charges. Read the conditions of sale for the figures that will actually apply.
Buyer's premium: what a hammer price really costs
The hammer price is not the price. On top of it the buyer pays a buyer's premium to the auction house, and sales tax or VAT is charged on that premium. At the same time the seller pays a commission out of the same hammer figure. Both sides pay the house, which is why the gap between what a lot cost and what its owner received is always larger than people expect.
This calculator shows both ends of that transaction at once: the buyer's total, the seller's net, and the share of the hammer price the sale itself consumed.
How premiums are structured
Major houses charge a tiered buyer's premium: a higher rate on the first band of the hammer price, then lower rates on the amounts above successive thresholds. In recent years the top band at the international houses has sat in the mid-twenties percent, tapering into the teens on multi-million dollar lots. Regional and online salerooms often charge a flat rate instead, and online bidding platforms may add a further fee of a few percent.
Rates change, and they differ by sale and by category. The conditions of sale for the specific auction are the only authority; use them for the figures you enter above.
What the seller actually receives
A seller's commission is negotiated, and on desirable property it can fall to zero — occasionally below zero, where a house offers an enhanced hammer share to win a consignment. Against that, deduct the charges that appear on a settlement statement: photography, cataloguing, framing, insurance while in the house's care, shipping, and unsold-lot fees if it does not sell.
Add them all up before you consign. A lot that hammers at $10,000 does not put $10,000 anywhere near your account.
Bidding to a budget, not to a hammer
Work backwards. Decide the total you are willing to pay, then divide by one plus the premium rate and the tax on it. That is your maximum bid. Bidders who set their limit on the hammer price alone routinely overshoot their budget by a quarter.
Questions we are asked
- What is a buyer's premium?
- A commission the auction house charges the buyer on top of the hammer price. It is usually tiered, and sales tax or VAT is charged on the premium itself.
- How much is the buyer's premium at auction?
- At the major international houses it sits in the mid-twenties percent on the lower band and tapers on higher bands. Smaller and online salerooms often use a flat rate, sometimes plus a platform fee. Always read the conditions of sale.
- Do sellers pay commission too?
- Yes, on the same hammer price, plus charges for photography, cataloguing, insurance and shipping. Commission is negotiable on property a house wants.
- How do I calculate my maximum auction bid?
- Take your total budget and divide it by one plus the premium rate plus tax on the premium. Bid to that hammer figure, not to your budget.
Before You BidRead the lot first
What a piece appears to be, before what is asked for it — photograph the work and start from a figure of your own.