Tips in full: how the UK Allocation of Tips Act works

Since 1 October 2024 a law in the United Kingdom bans employers from holding back tips. If you work in a cafe, restaurant, bar, hotel or salon, all tips and service charges must reach staff without deductions — the only lawful deduction is income tax.

The rules sit in the Employment (Allocation of Tips) Act 2023 and a statutory Code of Practice published on 29 July 2024. The Act received Royal Assent on 2 May 2023, and the Code and the key provisions came into force on 1 October 2024.

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Who must receive tips, and by when?

Tips must be distributed to workers by the end of the month after the month the customer paid. For example, a tip left on 23 June must be paid out by 31 July at the latest. An employer may not delay payment or keep a share.

The rule covers cash, card tips and service charges where the employer controls them. The split must be fair and transparent across everyone involved in the service.

What is a tronc and who runs it?

A tronc is an independent tip-sharing arrangement. The employer can appoint a troncmaster — a staff member chosen by colleagues, or an external payroll or accountancy firm. If the employer reasonably believes the tronc runs independently and fairly, it is treated as complying with the Code. But on learning of a problem it must act — up to replacing the operator or ending the scheme. Responsibility for fairness ultimately stays with the employer.

What records must an employer keep?

Where tips are paid more than occasionally, the employer must have a written tipping policy. It must be in plain language, available to all staff, and provided in an accessible format to disabled workers on request.

The employer must also keep a record of all qualifying tips and retain it for three years from the date the tip was paid.

How can you check you are being paid fairly?

A worker may make a written request for their tipping record — no more than once every three months. The request can look back up to three years, but only for periods you were employed. The employer gives the total qualifying tips for the period and the amount allocated to you, but not other workers' figures.

If a dispute is unresolved, a worker (including agency workers) can go to an employment tribunal. Mediation through Acas is recommended first. A tribunal can order a revised allocation, make a public declaration, or award compensation — including to other workers who did not complain.