Karnataka notifies 1% Gig Welfare Fee, Caps Levy at ₹1.50 Per Transaction

Bengaluru

The Karnataka government has operationalised a 1% welfare fee on payouts made by app-based platforms to gig workers, fixing per-transaction caps between ₹0.50 and ₹1.50 across categories.

The February 13 order brings into force key provisions of the Karnataka Platform Based Gig Workers (Social Security and Welfare) Act, 2025 and the Rules notified last year  . The levy, termed the “Platform Based Gig Workers Welfare Fee”, will be collected from aggregators and platforms—not workers—and calculated on the final payout for each transaction.

For ride-hailing services, the cap is ₹0.50 for two-wheelers, ₹0.75 for three-wheelers and ₹1 for four-wheelers. Food and grocery delivery (2W) will attract a cap of ₹0.50.

In logistics, the cap ranges from ₹0.50 (2W) and ₹0.75 (3W) to ₹1 (light commercial vehicles) and ₹1.50 (heavy commercial vehicles). E-marketplace services carry similar vehicle-based caps, while professional activity providers will face a 1% fee capped at ₹1.50  .

Under Section 20 of the Act, the state can levy between 1% and 5% of the payout as welfare fee. The government has set the rate at the minimum 1% for now, subject to caps. Rule 17 requires platforms to automatically calculate the fee within five working days of each quarter’s end, self-declare it in a standard format and deposit it with the government. Tips, incentives and other settled payments are excluded from the levy  .

The law also provides for a Payment and Welfare Fee Verification System (PWFVS) to track payouts and fee remittances. Until it is operational, platforms must self-report transaction-wise details quarterly  .

The government said the levy will fund social security schemes for gig and platform workers. All platforms covered under Schedule-I of the Act have been directed to comply with immediate effect.