Tips at work in the UK: who owns them by law and what to do if they are withheld

Tips left in a British cafe, pub or restaurant belong by law to the people who worked the shift, not to the business. Since 1 October 2024 an employer must pass on all qualifying tips in full, with no deductions in its own favour. The rule comes from the Employment (Allocation of Tips) Act 2023 and the statutory code of practice published on GOV.UK.

Who owns tips under the law?

Workers do. The employer may not hold back anything for itself — no card-processing percentage, no share towards running the venue. A discretionary service charge added to the bill falls under exactly the same rules: in law it is a tip.

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Which tips are covered and which are not?

Those that pass through the employer or sit under its control. The code of practice splits them in two.

The first group is employer-received tips: money that reaches the business itself, an associated person, or arrives under the venue's payment arrangement. Card payments and the service charge on the bill nearly always land here.

The second is worker-received tips, but only where the employer controls or significantly influences how they are shared — for instance by telling staff how to split cash, or by collecting it and handing it out.

Outside the rules: cash a customer hands to a worker who keeps it with no involvement from the venue, and digital tips paid straight to a worker through an app.

By when must tips be paid out?

By the end of the month following the month in which customers paid them. The code gives a direct example: a tip left on 23 June must be distributed by 31 July.

What is a tronc and who runs it?

A tronc is a separate arrangement for sharing out tips. An employer may use one, either appointing a member of staff to run it or handing it to an independent tronc operator — an external payroll or accountancy firm, or a worker the team has elected or agreed on.

An employer that reasonably believes an independent operator is acting independently and fairly is treated as complying. But once it learns the arrangement is being run unfairly or improperly, it must act: change the operator's instructions, replace the operator, or end the arrangement.

What goes in the written policy, and how long are records kept?

A written tipping policy is required wherever qualifying tips are paid on more than an occasional and exceptional basis. It sets out how the venue accepts tips, how it allocates and distributes them, and the steps it takes to be fair and transparent. It must be in plain language, available to all workers including agency workers, and supplied in an accessible format on request.

Tipping records must be kept for three years beginning with the date the tip was paid, showing the qualifying tips received and the amount allocated to each worker.

How do you request your own records?

By a written request to the employer. A worker may make one request in any three-month period. It can cover up to three years, but only a period during which the worker was actually employed there.

The reply gives two figures: the total qualifying tips for the period and the worker's own allocation. Colleagues' amounts are not disclosed. Acas states the employer must provide the records within four weeks of the request.

What about agency workers?

They are protected on the same terms. For them the "employer" is the hirer where they actually work, even though the contract sits with the agency. The hirer pays the tips to the agency, and the agency must pass them on without unauthorised deductions. Queries from agency workers must be given the same weight as those from directly employed staff.

Where do you complain, and what are the deadlines?

Internally first: raise it with management, then as a formal grievance. Acas offers advice and mediation. If that fails, the route is an employment tribunal — and two different time limits apply.

A complaint about unfair allocation of tips must be brought within twelve months of the failure. A complaint about a missing written policy or missing records must be brought within three months. A tribunal may allow a late claim where it was not reasonably practicable to bring it in time.

On a policy or records complaint the tribunal may award compensation of up to £5,000 for financial loss. On an allocation complaint it may declare the failure publicly, order the allocation to be revised and order a payment — and that decision can extend to other workers at the same place of business who brought no claim of their own.

Do tips count towards the minimum wage?

No. GOV.UK states plainly that tips do not count towards the National Minimum Wage, so an employer cannot top wages up to the legal minimum out of tips. Income Tax is still due on tips, and National Insurance may be.

The practical takeaway for anyone working in UK hospitality: ask for the written policy and request your records. It is not a confrontation but a procedure the law provides — and a missing policy or missing records is the shortest, clearest route to a tribunal.