Rules 1-2 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Rule 1 gives the Rules their name and says they come into force on publication in the Official Gazette. Rule 2 defines the terms used throughout, from "average daily wages" to "ShramSuvidha Portal". These two rules are the key to reading every other rule.
The Rules were notified by G.S.R. 344(E) on 8 May 2026 and, under rule 1(2), came into force on the date of publication in the Official Gazette. The short title printed in rule 1(1) is the Social Security (Central) Rules, 2026. They are made under sections 154, 155, 158 and 159 of the Code and supersede twelve sets of older rules, except as to things done or omitted before. Rule 2 defines about 34 terms and says that words defined in the Code but not in the Rules have the Code's meaning.
Rule 1: title and commencement
Rule 1(1) says: "These rules may be called the Social Security (Central) Rules, 2026." Readers often call them the Code on Social Security (Central) Rules, 2026; both refer to the same notification. Rule 1(2): "They shall come into force on the date of their publication in the Official Gazette."
The preamble records the path: the draft Social Security (Central) Rules, 2025 were published under sections 154, 155, 158 and 159 on 30 December 2025 (G.S.R. 935(E)), inviting objections and suggestions within forty-five days. After considering them, the Central Government made the final Rules, read with section 24 of the General Clauses Act, 1897. The Code itself is in force from 21 November 2025, when the four Labour Codes were brought into force.
The twelve sets of rules superseded
| No. | Rules superseded |
|---|---|
| i | Employee's Compensation Rules, 1924 |
| ii | Employee's Compensation (Transfer of Money) Rules, 1935 |
| iii | Employees' State Insurance (Central) Rules, 1950 |
| iv | Employment Exchanges (Compulsory Notification of Vacancies) Rules, 1960 |
| v | Maternity Benefit (Mines and Circus) Rules, 1963 |
| vi | Payment of Gratuity (Central) Rules, 1972 |
| vii | Cine-Workers Welfare Fund Rules, 1984 |
| viii | Employee's Compensation (Venue of Proceedings) Rules, 1996 |
| ix | Tribunal (Procedure) Rules, 1997 |
| x | Employees' Provident Funds Appellate Tribunal (Conditions of Service) Rules, 1997 |
| xi | Building and other Constructions Workers' Welfare Cess Rules, 1998 |
| xii | Unorganised Workers' Social Security Rules, 2009 |
The supersession is "except as respects things done or omitted to be done before such supersession". An employer with a pre-2026 gratuity or compensation matter should therefore check which rules governed the step in question. For advice on moving your compliance calendar to the new rules, see our labour law compliance service.
The Central Rules apply where the Central Government is the appropriate Government. Where the State Government is the appropriate Government, the State's own rules apply.
Rule 2: definitions that change how you read the Rules
Rule 2(1) defines terms in alphabetical order. The ones employers and payroll teams meet most often are below.
| Term | What rule 2 says |
|---|---|
| Average daily wages during a contribution period | Aggregate wages payable during the period divided by the number of days for which they were payable (clause (g)) |
| Average daily wages during a wage period | For time-rated employees, the wage for the full period had he worked all working days, divided by 26 if monthly, 13 if fortnightly, 6 if weekly, 1 if daily; for other employees, wages earned divided by days worked (clause (h)) |
| Benefit period | A period not exceeding six consecutive months corresponding to the contribution period, as specified in regulations under section 157 (clause (i)) |
| Contribution period | A period not exceeding six consecutive months, as specified in regulations under section 157 (clause (q)) |
| Electronically | Information submitted by email, by uploading on the designated Portal, or by digital payment in any mode (clause (r)) |
| Standard benefit rate | Average daily wages obtained by dividing total wages paid during the contribution period by the number of days for which those wages were paid (clause (zf)) |
| Year | The financial year, 1 April to 31 March (clause (zh)) |
| ShramSuvidha Portal | The portal of the Ministry of Labour and Employment with that name (clause (zd)) |
| Specified | Specified by an order of the Central or any State Government or an authorised officer (clause (ze)) |
Other definitions worth knowing:
- Agency (clause (a)): a corporation, body or institution established under an Act of Parliament, or a central public sector undertaking or special purpose vehicle, as notified by the Central Government.
- Appellate authority (clause (c)): in the Central sphere, the Central Government or the authority specified under s.56(8); in the State sphere, an officer senior in rank to the Assessing Officer for s.105, appointed by the State Government.
- Assessing Officer (clause (d)) and cess collector (clause (m)): State-appointed officers for cess under Chapter VIII.
- Authorised Officer for Employees' Compensation (clause (e)): an officer designated by the State Government.
- Career centre (clauses (j) to (l)): central and regional career centres notified by the Central and State Governments, with special provisions for Chandigarh.
- Nodal officer (clause (y)): a person designated by the Building Workers' Welfare Board or the State Government to facilitate registration, renewal and updation for building workers.
- Fund (clause (u)): the ESI Fund (s.25), the Provident Fund, Pension Fund and EDLI Fund (s.16) or the Social Security Fund (s.141), as the case may be.
- Electronically matters in practice because many rules let employers file on the portal or by email.
Rule 2(2) closes the loop: words not defined in the Rules but defined in the Code have their Code meaning.
A worked example of average daily wages
A monthly-rated employee has a wage of ₹26,000 for the complete wage period had he worked on all working days. Under clause (h)(i), the average daily wage for that wage period is ₹26,000 divided by 26, which is ₹1,000. If he received wages without working on any day of that wage period, the proviso deems him to have worked 26 days for a month-long period. Where a night shift continues beyond midnight, the part after midnight counts as part of the preceding day (Explanation). (Illustrative figures.)
Need help moving to the new Rules?
If your payroll, gratuity or compensation processes still follow one of the twelve superseded sets of rules, our labour law compliance team can map each step to the matching rule and the forms appended to them.
Key takeaways
- The Rules were notified by G.S.R. 344(E), 8 May 2026, and are in force from publication (rule 1(2)).
- They are made under ss.154, 155, 158 and 159 and supersede twelve sets of rules, except as to things done earlier.
- Contribution period and benefit period are each not more than six consecutive months, set by regulations under s.157.
- Average daily wages divide by 26, 13, 6 or 1 depending on whether the wage period is a month, fortnight, week or day.
- Central Rules apply where the Central Government is the appropriate Government.
Read next
- Rule 3 and 4: Inapplicability of Chapters III and IV and dependent parents' income
- Rule 5: Registration of establishments
- Sections 154 and 155: Power to make rules
- 4 Labour Codes 2020: Wages, IR, OSH and Social Security
Disclaimer: Based on the Code on Social Security, 2020 (as enacted) and, where noted, the Code on Social Security (Central) Rules, 2026 (G.S.R. 344(E), 8 May 2026), as on 30 September 2026. The Code is in force from 21 November 2025; some provisions may be notified later, and State Governments make their own rules for establishments where the State is the appropriate Government. Verify the current position before acting.