What you’ll actually pay at the auction.
The hammer price is rarely what you pay.
When you win an item at auction, the auction house adds a buyer’s premium— a percentage-based surcharge that covers their costs and profit. On top of that, most states tax the full total including that premium, and be mindful that auction houses often adds shipping, storage, or handling fees.
The formula: total = hammer × (1 + premium%) × (1 + tax%).
A $100 hammer with 18% premium and 7% tax becomes $126.26 at checkout — a 26% markup over the winning bid. For resellers, missing this math turns profitable resales into break-even trades.
Questions, answered.
What is a buyer's premium?
A buyer's premium is a surcharge added on top of the hammer price (winning bid) that the buyer pays to the auction house. It's typically expressed as a percentage — commonly 10% to 25% — and is how most auction houses make their money alongside seller commissions.
How do you calculate buyer's premium?
Multiply the hammer price by the buyer's premium percentage. For example, a $100 hammer price with an 18% buyer's premium equals $18 in premium fees, making the subtotal $118. Sales tax, when applicable, is then calculated on that subtotal, not on the hammer price alone.
Is sales tax charged on the buyer's premium?
Yes, in most U.S. states sales tax applies to the full transaction including the buyer's premium. The tax is calculated on the subtotal (hammer + premium), which is why the final total is often higher than new buyers expect.
What is a typical buyer's premium at online auctions?
Online auctions commonly run 10–28% depending on the auction house. Government surplus auctions tend to be on the lower end (7.5–10%), while fine art and specialty platforms often charge 20–28%. Always confirm the premium on the specific auction's terms page — rates vary by auctioneer.
Does the buyer's premium include shipping?
No. Shipping, packing, storage, and payment processing fees are separate charges on top of the hammer price plus buyer's premium plus tax. For a full landed cost, use our Auction Profit Calculator instead.
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