If you’re setting up a tronc scheme or reviewing an existing one, consulting your employees shouldn’t be a box-ticking exercise. It’s fast becoming a legal requirement, and it’s one of the most important steps you can take to make your scheme actually work.
The Employment (Allocation of Tips) Act 2023 has been in force since October 2024. Right now, the statutory Code of Practice strongly recommends that employers consult their workforce when designing or changing how tips are allocated. From October 2026, under the Employment Rights Act 2025, that recommendation becomes a hard legal obligation. So if consultation isn’t already part of your process, now is the time to get ahead of it.
Why it matters beyond compliance
Tronc schemes only work well when staff trust them. If your team thinks the split is unfair, or they don’t understand how it works, you’ll feel it — in motivation, in service quality, and ultimately in the tips themselves. A scheme your staff helped shape is one your staff will believe in. And that’s good for everyone.
Getting the scope right first
Before you open any conversation with your team, you need to be clear on what you’re consulting about. That means agreeing internally on which payments will be included in the tronc – which tips should be pooled, and are discretionary. Getting that scope pinned down before you bring employees into the room makes for a much more productive conversation and ensures you’re not revisiting fundamental decisions once consultation is underway. Remember, however, that the legislation states that 100% of the tips should go to the employees, without deductions (apart from tax).
Who you need to talk to
The legislation sets out clearly who the consultation should involve. If you have recognised trade union representatives, start there. If you have elected employee representatives, include them. If neither applies, which is the case in most hospitality businesses, you consult with your workers directly.
Don’t mistake direct consultation for a less formal one. A performative or informal exercise won’t cut it under the legislation, and it certainly won’t build the trust that makes a tronc scheme function well.
Bringing the right voices into the room
Your front-of-house team understands tipping better than almost anyone. They know when it’s busy, how tips flow, and which roles shape the customer experience most directly. Their input on allocation rules isn’t just useful, it’s essential if you want a scheme that people genuinely believe is fair.
Back-of-house staff matter too. Great food is as fundamental to the customer experience as great service, and more businesses are rightly including kitchen teams in the tronc pool. You may also need to include teams such as prep kitchens that work across multiple sites and even admin or housekeeping teams.
Consultation is the right time to work through questions of fairness openly, rather than making assumptions and implementing a policy that causes resentment later.
Tip distribution options
There’s no single right allocation model. The best approach depends on your business, your team, and your operational structure.
The most common methods include;
- Equal distribution, where everyone receives the same share regardless of role
- Weighted distribution, where teams receive a portion of the tips pool, i.e. front of house 50%, back of house 40% and housekeeping 10%
- Points-based allocation, weighted by role, hours worked, or customer feedback
- Performance-based models, tied to individual or team targets
- Hybrid approaches that combine a base equal share with a performance element on top.
For a more in-depth look at distribution models, read our blog ‘Tronc scheme tips allocation and distribution options.’
Each has its pros and cons, and your staff will have views. Listen to them. The consultation process is the right place to work through the options honestly, not to present a decision already made.
The Troncmaster – why independence is non-negotiable
The Troncmaster is the person responsible for running the scheme and deciding how tips are distributed. This is where a lot of businesses go wrong, as not everyone can be a Troncmaster.
You cannot appoint a business owner, director, or anyone with hiring and firing responsibilities. HMRC requires genuine independence for the National Insurance exemption to apply, and employer influence over distribution decisions risks invalidating that exemption entirely.
For most businesses, the most practical solution is an independent third-party Troncmaster. It removes the administrative burden, keeps the scheme watertight, and avoids putting any member of your own team in an awkward position.
What you need to document
Once consultation is complete, you have clear obligations.
- You must summarise the views expressed during the process and make that summary available to all workers
- You must produce a written tipping policy, covering how tips are collected, allocated, and paid out
- You must distribute it to everyone who works for you, including agency and
- The policy needs to be included in your staff handbook and onboarding process.
None of this is optional. A written tipping policy is a legal requirement under the Act.
What your written policy needs to cover
Your policy should set out clearly which tips and service charges are included in the tronc pool, how that pool is calculated, the allocation method and the factors used, who the Troncmaster is and how to contact them, and when and how tips are paid out.
It also needs to explain how staff can request records of their individual tip allocation. Workers are entitled to ask for that information every three months, and you have four weeks to respond.
Keeping it current
Consultation isn’t something you do once and file away. From October 2026, the Employment Rights Act 2025 will require businesses to review their tipping policy at least every three years, with fresh consultation each time. Building that review into your calendar now means it won’t catch you off guard when the obligation comes into effect.
If you need help setting up a compliant tronc scheme, or you want an independent Troncmaster to take the whole process off your plate, that’s exactly what we do. Get in touch and let’s talk tronc.