Employee's Compensation Act, 1923 · Chapter II: Employee’S Compensation
Section 5: Method of calculating wages
The Employee's Compensation Act, 1923 was repealed and replaced by the Code on Social Security, 2020 from 21 November 2025. It still applies to matters and proceedings from before that date, as the repealing law provides.
*** [In this Act and for the purposes thereof the expression “monthly wages” means me amount of wages deemed to be payable for a month’s service (whether the
wages are payable by the month or by whatever other period or at piece rates), and calculated] as follows, namely:—
(a) where the [employee] has, during a continuous period of not less than twelve months immediately preceding the accident, been in the service of the employer who is liable to pay compensation, the monthly wages of the [employee] shall be one-twelfth of the total wages which have fallen due for payment to him by the employer in the last twelve months of that period; [(b) where the whole of the continuous period of service immediately preceding the accident during which the [employee] was in the service of the employer who is liable to pay the compensation was less than one month, the monthly wages of the [employee] shall be *** the average monthly amount which, during the twelve months immediately preceding the accident, was being earned by a [employee] employed on the same work by the same employer, or, if there was no [employee] so employed, by a [employee] employed on similar work in the same locality;] [(c)] [in other cases [including cases in which it is not possible for want of necessary information to calculate the monthly wages under clause (b)]], the monthly wages shall be thirty times the total wages earned in respect of the last continuous period of service immediately preceding the accident from the employer who is liable to pay compensation, divided by the number of days comprising such period. * * * * *
Explanation.—A period of service shall, for the purposes of [this [section]] be deemed to be continuous which has not been interrupted by a period of absence from work exceeding fourteen days. * * * *
Source: India Code (Legislative Department), the text of the Act as it stood before its repeal. Words in square brackets [ ] were inserted or substituted by later amending Acts, and *** marks words omitted by an amendment. The amendment footnotes are not reproduced here. Official text on India Code.
Supreme Court judgments citing the section 5
No Supreme Court judgment in our database cites this section yet.