Why more payroll providers are adding tronc services for their hospitality clients
If you run a payroll bureau, or manage the payroll team within an accountancy practice, there’s a good chance a decent chunk of your client base sits in hospitality. Restaurants, bars, hotels, cafes, most of these will take tips, and if they take tips, they almost certainly would benefit from a tronc scheme.
A tronc scheme is a HMRC approved pay arrangement to collect and distribute discretionary tips, gratuities and service charges that is exempt from National Insurance Contributions for both the employer and employee. For the employer, this 15% NIC saving can be substantial, and for employees, it means more of their tips reach their pockets.
Since the Employment (Allocation of Tips) Act 2023 came into force, tronc schemes have gone from a nice-to-have to something hospitality businesses need to get right. That shift has created an opening for payroll bureaus and accountants, not just an extra compliance headache.
Your clients already trust you with this
Hospitality clients bring you their payroll because they trust you to keep it compliant and to keep HMRC happy. Tips and troncs sit right next to that, yet many bureaus still leave clients to sort it themselves, or point them elsewhere.
That’s a missed opportunity.
Clients would rather deal with one trusted provider than manage separate relationships for payroll and tips. If you’re not offering tronc services, someone else is picking up that business, and possibly picking up a bigger slice of your client relationship along with it.
Tronc schemes are a genuine addition, not a distraction
The good news is that adding tronc services doesn’t mean building new expertise from scratch or taking on hours of extra admin. A well-run tronc scheme runs alongside payroll and with the right independent Troncmaster support, you can offer clients:
- A compliant, transparent way to allocate tips under the 2023 Act
- Fair distribution that stands up to scrutiny from staff or HMRC
- Proper record keeping and audit trails, without your team having to manage the detail
- Savings on both Employers’ and Employees’ National Insurance.
- One less thing for your hospitality clients to worry about
That last point matters more than it might seem. Hospitality is a sector with tight margins and constant staff turnover. Anything you can take off a client’s plate makes you more valuable to them.
It’s a retention tool as much as a revenue one
Adding tronc services isn’t only about a new income line, although that’s a welcome side effect. It’s about becoming harder to leave. A client who relies on you for payroll and compliant tip allocation has fewer reasons to shop around, and more reasons to recommend you to other hospitality businesses.
With the rules around fairness and consultation only getting tighter, hospitality clients need this sorted properly. Bureaus and accountants who offer it now are the ones who’ll be first in mind when a client’s current arrangement falls short.
Getting started doesn’t mean doing it all yourself
You don’t need to become tronc experts overnight. Partnering with an independent Troncmaster service means you can offer the benefit to clients under your own name, while the day-to-day running of the scheme, consultation, and record keeping is handled by people who do this every day.
If you’re weighing up whether tronc services belong in your offering, it’s worth a conversation before your hospitality clients start asking why you don’t already provide it.