What the 2024 law says
The Employment (Allocation of Tips) Act 2023 came into force on 1 October 2024 (legislation.gov.uk). With its statutory code of practice (GOV.UK), it sets five rules for employers:
- All of it goes to workers. Tips, gratuities and service charges, passed on without deductions, except in very limited cases such as income tax.
- Shared fairly. The split has to be fair, and the employer stays responsible for it even when someone else runs the tronc.
- Paid on time. By the end of the month after the month the customer paid.
- A written tipping policy, in plain language, available to every worker.
- Records for 3 years, and you can ask to see the ones about you, once every three months.
Which tips the law covers
Card tips and service charges are covered, because they pass through the business. A service charge is any amount added to the bill before the customer sees it; it can be optional or compulsory, and either way it’s money the customer paid for the service.
Cash handed straight to you is different. It’s covered when your employer has control or significant influence over it, for example if it tells staff how to share cash tips or collects them and shares them out at the end of the shift (code of practice). If you just pocket what a table leaves you, it’s yours, and the law doesn’t touch it.
How a tronc works
A tronc is the pot tips and service charges are shared through. It’s run by a troncmaster: a member of staff the employer appoints, one the staff elect, or an outside payroll or accountancy firm. A common way to share is by hours worked, sometimes with points for different roles.
- Tronc potCard tips and service charge
- £1,860.00
- Everyone’s hours
- 465 h
- Each hour worked£1,860.00 ÷ 465 h
- £4.00
- Your hours
- 52 h
Your share, before tax£208.00
Tax depends on who decides the split (HMRC guidance E24):
- Income tax is always due. Tips paid through payroll go through PAYE, tronc included.
- No National Insurance on tronc payments when the troncmaster decides the split, the employer has no say in it and doesn’t pay the money out itself.
- National Insurance is due in most other cases where the employer passes tips on, and always on a compulsory service charge paid out to staff, however it’s shared.
- Cash you keep: you tell HMRC, and the tax is usually collected through your tax code.
Tips never count towards your minimum wage
Since 2009, tips, tronc and service charge haven’t counted towards the minimum wage (code of practice). Your basic pay has to reach the rate for your age on its own: £12.71 an hour at 21 and over from 1 April 2026 (GOV.UK). A good tronc doesn’t make up for a low hourly rate. Check yours with the minimum wage checker.
How to check you’re getting it
- Ask for the written tipping policy. It has to say how tips are collected and shared.
- Keep your own note of each shift: hours, cash tips, and card tips if you can see them when you cash up.
- Find the tronc or service charge line on your payslip and compare it with your hours. It may pay a month behind: that’s allowed.
- If the numbers don’t add up, ask to see the tipping records about you, in writing.
- Still stuck? Acas is the first stop before an employment tribunal, and tribunals can hear claims about tips.