Turnover Formula Seen More Proportionate
New Delhi, September 6, 2026: India’s proposed social security contribution mechanism for gig and platform workers has triggered debate over whether aggregators should contribute based on annual turnover or on worker payouts and individual transactions.
The Code on Social Security, 2020 requires aggregators to contribute to a Social Security Fund for gig and platform workers. Under the framework, workers become eligible for benefits after meeting specified engagement requirements with aggregators.
The existing framework provides for an aggregator contribution of 1-2 per cent of annual turnover, subject to a ceiling of 5 per cent of the amount paid or payable to gig and platform workers. The Labour Ministry is separately considering a payout-linked approach under which contributions could be calculated at up to 5 per cent of worker payments.
Analysts and industry sources argue that the two approaches could produce significantly different financial outcomes for businesses with different transaction volumes, ticket sizes and revenue structures.
For example, a food-delivery platform processing 30 lakh orders a day at an average worker payout of Rs 30 per order and annual turnover of Rs 20,000 crore could face an estimated annual contribution of around Rs 164.25 crore under a 5 per cent payout-based formula.
A ride-hailing platform processing around 60 lakh trips a day could face a much larger estimated liability under the same formula. In the example cited by analysts, the contribution could reach around Rs 1,428.1 crore against annual turnover of Rs 1,000 crore.
Industry representatives argue that such a structure could disproportionately affect high-frequency, low-ticket businesses such as ride-hailing platforms, where transaction volumes are high but aggregator revenue may be comparatively limited.
Analysts supporting a turnover-based approach say it would better connect the levy to the economic scale of the platform. At a 2 per cent contribution rate, an aggregator with Rs 20,000 crore in annual turnover would contribute Rs 400 crore, while one with Rs 1,000 crore turnover would contribute Rs 20 crore.
The debate also extends to workers. A uniform percentage applied to earnings can result in significantly different absolute contributions between delivery workers, bike-taxi drivers, auto drivers and cab drivers because their earnings differ.
Industry sources argue that a contribution system should provide social security without creating disproportionate costs for businesses, workers or consumers. They also warn that excessive transaction-linked costs could eventually be absorbed by platforms, reflected in worker economics or passed on to customers.
The policy debate is therefore centred on proportionality and sustainability as India prepares to operationalise social security provisions for its growing gig workforce.
