India’s ministry of labour and employment notified Social Security Rules, 2026, in May and has since moved towards the operationalization of this framework for gig and platform workers, including mandatory onboarding of aggregators and workers on the e-Shram portal and penalties for delayed contributions.
As rule implementation begins, a significant policy challenge has emerged that concerns the code’s turnover-linked contribution framework, which can create substantially different liabilities for platforms with different business and revenue-recognition models.
The reform of labour rules is an important step towards extending statutory social security beyond the traditional employer-employee relationship. However, its contribution design warrants closer examination to ensure that comparable workers receive comparable social security support.
This challenge stems from the backdrop in which the code was formulated in 2020. India’s gig economy was still in its formative stage, with platform work largely concentrated in ride-hailing and food-delivery services. Consequently, the contribution mechanism reflected the business models and financial structures prevalent at the time.
Since then, India’s gig economy has diversified significantly, spanning logistics, quick commerce, home services, e-commerce, professional services and several other sectors. These platforms differ considerably in how they facilitate transactions, generate value and recognize revenue. However, the code still uses a uniform contribution formula across these varied businesses.
Under the code, aggregators are required to contribute between 1% and 2% of their annual turnover to a social security fund, subject to a ceiling of 5% of the amount paid to gig and platform workers. Based on this provision, the contribution rate remains common across platforms. However, the turnover base on which it is calculated varies substantially.
A two-sided platform directly connects a customer with a gig worker. Ride-hailing is a common example, where a passenger is matched with a driver. Such platforms generally record only the commission retained from each transaction as revenue, while the remaining amount is paid to the driver.
A three-sided platform connects a customer, a merchant and a gig worker. Food-delivery platforms typically operate on this model by linking customers, restaurants and delivery workers. Their revenue may include merchant commissions, advertising income, delivery charges and also payments for various other value-added services offered.
A principal service provider delivers services by engaging gig workers to carry them out. Several logistics businesses operate on this model. Since the company directly provides or sells the service, it records the full value of that service as its turnover.
These distinctions have a direct bearing on social security contributions. Applying the same percentage to fundamentally different turnover bases produces substantially different contribution outcomes, even when gig workers earn comparable incomes.
Fiscal 2023–24 disclosures illustrate the disparity inherent in a turnover-linked contribution model.
At a 1% levy, a ride-hailing platform with a turnover of ₹807 crore and approximately 650,000 active workers would contribute only about ₹10 per worker per month. In contrast, a food-delivery platform with ₹6,361 crore turnover and around 200,000 workers would contribute approximately ₹265 per worker per month.
Similarly, a home-services platform with ₹738 crore revenue and 50,000 workers would contribute about ₹123 per worker, while a quick-commerce platform with ₹2,310 crore revenue and 134,000 workers would contribute roughly ₹143 per worker per month.
As a result, a gig worker earning a similar monthly income of around ₹27,000 could generate contributions ranging from as little as ₹10 to as much as ₹265, depending not on their earnings, but just on the underlying business model and financial structure of the platform or company they work with.
The gaps widen further in four-wheeler logistics and higher-value skilled services such as beauty and wellness, where turnover per worker is higher while the contribution rate remains the same.
The difference does not arise from the worker’s income, hours worked, occupational risk or entitlement to social security benefits. It arises primarily from the manner in which the platform recognizes turnover.
So how can equity be ensured across business models?
Now that the government has begun to operationalize social security schemes for gig and platform workers, it could reconsider whether turnover provides an equitable contribution base across fundamentally different digital-business models.
The contribution mechanism could be reviewed to consider linking contributions to the amount payable to gig workers, rather than annual turnover. Worker payouts provide a more comparable base across business models.
This approach would align contributions more closely with the scale of gig-worker engagement and reduce disparities arising solely from differences in accounting models. The objective is to ensure that the mechanism is equitable and commercially neutral as India’s gig economy evolves.
The authors is president, Centre for Domestic Economy Policy Research.