Auction glossaryBuyer's Premium: Definition and How It's Calculated
A buyer's premium is a percentage fee an auction house adds to the hammer price of every lot you win. The house sets the rate, lists it in the sale terms, and the buyer pays it on top of the winning bid. A 15% premium on a $200 hammer price adds $30.
How is a buyer's premium calculated?
Multiply the hammer price by the premium rate, then add sales tax to the total where it applies. On a $200 winning bid with a 15% premium, the premium is $30 and the subtotal is $230. At Houston's 8.25% sales tax that adds $18.98, for $248.98. More worked examples are in our buyer's premium guide.
Why do auction houses charge a buyer's premium?
It splits the cost of running a sale between both sides, so the house can charge sellers a lower commission. Rates vary by house and sometimes by sale, which is why reading the terms before you bid matters. Houses choosing a rate can read how much buyer's premium to charge.
How does Auktia show the buyer's premium?
On Auktia, the buyer's premium is called the buyer's fee. Each auction lists its buyer's fee, and Auktia can show every price all-in: winning bid, buyer's fee, tax and shipping, computed on the live bid. The fee shows up while you bid, not as a surprise on the invoice.
Questions people ask
Is the buyer's premium negotiable?
Rarely for a single bidder. It's part of the terms you accept when you bid, though some houses offer a lower rate for paying by cash or bank transfer.
Is the buyer's premium taxable in Texas?
Generally yes, because the premium is treated as part of the sales price. Check with the Texas Comptroller or an accountant for your situation, especially if you buy for resale.