Karnataka To Collect 1% From Aggregators For Gig Workers’ Social Security

The Karnataka government has begun collecting a 1 percent welfare fee from major digital platform aggregators such as Swiggy, Zomato, Ola and Uber under a recently notified social security framework aimed at supporting gig economy workers across the state. The move — part of the Karnataka Platform-Based Gig Workers (Social Security and Welfare) Act, 2025 — represents one of India’s first targeted levies to fund comprehensive welfare schemes for app-based workers.

Under the terms of the government order issued in February 2026, platforms operating in Karnataka must collect the levy on each enabled transaction conducted through their services and remit it to the state’s dedicated Gig Workers Welfare Fund. The fee has been fixed at 1 percent of the payout made to a gig worker per transaction, and is subject to caps that vary by vehicle type and service category.

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For ride-hailing services, the levy is capped at ₹0.50 for two-wheelers, ₹0.75 for three-wheelers, and ₹1 for four-wheelers. In the case of food and grocery delivery services using two-wheelers, as well as logistics and e-marketplace deliveries, the fee is capped at ₹0.50, ₹0.75 or ₹1 depending on vehicle class, while heavy commercial vehicles face a cap of ₹1.50 per transaction.

The government’s notification also outlines procedural requirements for compliance. Aggregators are required to calculate the welfare fee on each transaction, self-declare the total amount due, and remit funds within five working days from the end of each quarter. Payments will be processed through a newly established Payment and Welfare Fee Verification System (PWFVS), intended to promote transparency and allow workers, platforms and regulators to track collections and utilisation.

Officials have clarified that the fee applies only to the payout made to gig workers and does not extend to additional payments such as tips, incentives or referral bonuses. Details for remitting the welfare fee, including bank account information, are being published on the Karnataka Labour Department’s website.

The levy follows several years of policy discussions in Karnataka aimed at providing formal social security and welfare protections to platform-based workers, who historically have lacked guaranteed benefits despite contributing substantially to the delivery and mobility economy. The new welfare fee is expected to help fund health insurance, accident coverage, retirement benefits, and other support mechanisms for this growing workforce, which includes delivery partners, drivers and logistics personnel across multiple service sectors.

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