Tips are personal. They’re a guest’s way of saying thank you, and everyone on shift wants to know they’re getting their fair share. No wonder Troncmasters get asked a lot of questions.
These are the ones we hear most often, from both employees, employers and business owners.
The basics
What’s a tronc?
It’s a shared pot. Tips and service charges go in, and they’re shared out across the team using a set of agreed rules.
And a Troncmaster?
The person (or company) who runs the pot through a tronc scheme. They work out everyone’s share, make sure tax is taken off, pay it out and keep a record of every penny.
Who can be the Troncmaster?
A trusted member of staff, a small group of staff or an independent provider. Whoever it is, they have to be independent of the business. If the owner, or someone who runs the business, decides who gets what, HMRC won’t treat it as a tronc. Very small family businesses can sometimes agree a different set-up with HMRC, so check first.
Read our article ‘Who cannot be Tronmaster’ for examples of where people get this wrong.
Does HMRC need to know?
No. If you have an independent Troncmaster in place and the tips are processed through the employer’s payroll, you don’t need to tell HMRC.
What goes in the tronc pot?
Which tips can be included?
Anything the business receives or controls. That means card tips, app tips, discretionary service charges on the bill, and cash that goes into a shared jar or gets handed in to be pooled. Mandatory charges, such as cover charges, are not eligible to be included in a tronc scheme and are classed as business income.
If you’re not sure of the difference between the different types of tips, check out this blog.
A guest hands me a fiver. Is that mine?
If it came straight to you and the business has nothing to do with it, yes, and the tipping law doesn’t cover it. If your workplace has a rule that cash goes into the shared pot, the law does cover it and it gets shared fairly.
Can the business knock off card fees?
No. Card fees, admin charges and platform costs can’t come out of tips. The only deductions allowed are the ones the law requires, such as income tax. The business covers everything else.
This was one of the biggest changes that the Allocation of Tips Act brought in, as previous to this it was common for businesses to take any third party fees, such as Troncamster services, out of the tips pool before distribution, This is no longer legal.
Do service charges count?
Yes. A service charge is treated like a tip, so it’s passed on in full and shared fairly. Calling it something else won’t change that, because what matters is what the payment actually is.
How it’s taxed depends on the type.
- A discretionary service charge goes into the tip pool like any other tip.
- A compulsory service charge is part of the price the guest has to pay, so it’s the business’s money first.
- If the business pays it out to staff, income tax and National Insurance both have to go through payroll.
Sharing it out
How’s the pot split?
There’s no single right way. Points by role, hours worked, a mix of the two or equal shares can all be fair. The method has to be written into the tipping policy, used the same way every time and easy for everyone to follow.
For ideas on how you can build fair rules for your tips distribution, read our article on ‘Tronc scheme tip allocation and distribution options.’
Does the kitchen get a share?
We’d say yes. Guests tip for the whole meal as well as the service, and the food doesn’t cook itself. Most operators include back of house staff in their distribution rules. But whoever is or isn’t included, the decision must be transparent and fair, so the exclusion of kitchen staff would need a very good explanation.
What about managers and owners?
Owners and the business can’t keep any portion of the tips. Managers who work the floor or the pass can be included if it’s fair for their role. Keep it balanced, though. Fixed or guaranteed amounts for particular people are hard to defend, and so is a split that favours senior staff.
I’m agency staff. Do I get tips?
Yes. Agency workers are covered by the law and get a fair share, with no deductions.
For more information on this development since the allocation of Tips Act, read our article ‘Why leaving agency workers out of your tronc scheme is no longer an option.’
When do I get paid?
Employees who are part of the tips allocation and worked during the pay period, must receive either share of the tips by the end of the month after the guest paid, at the latest. For example tips from the first week in March need to be with you by the end of April.
I’ve left. What happens to my tips?
Even if you have left the business, if you worked a shift where tips were given, you earned your share, and they must be paid on the usual timetable. Usually this would be with your final pay or soon after.
Who decides on who gets what?
The Troncmaster, following the rules in the tipping policy, decides on the allocation rules in a tronc scheme. The business and business owners/directors must stay out of individual allocations, which keeps things fair and protects the National Insurance savings. Once the rules are established, they must be followed every pay period. Any deviations must be agreed by tronc members (employees).
Tax and National Insurance
Do I pay tax on tronc money?
Yes. It’s income, so tax is taken off through PAYE before you’re paid, and you’ll see it on your payslip.
Why is there no National Insurance?
If the business has no say, directly or indirectly, in who gets what, tronc payments are free of National Insurance for you and for the business. That’s why the Troncmaster has to be independent. If the business starts steering the split, HMRC can charge National Insurance, and it can go back up to 6 years.
Does the tronc need its own payroll (PAYE)?
No, whatever you may have heard. Our full guidance on this runs to over 5,000 words, but here’s the short version. When an independent Troncmaster decides how the tips are shared, the employer can pay them through its existing payroll, under a separate tronc heading on the payslip.
For more detail, read our blog ‘Why a separate PAYE scheme is unnecessary for tronc arrangements.’
Can tips count towards the minimum wage?
No. Tips, service charges and tronc payments can’t be used to reach the National Minimum Wage or National Living Wage. Your basic pay has to get there on its own, and tips sit on top.
The rules
What does the law say?
Since 1 October 2024, the Employment (Allocation of Tips) Act 2023 has required businesses to pass on 100% of tips, share them fairly and openly, have a written tipping policy if tips come in regularly, and keep records. A tronc is a good way to do all of that. But, even with a Troncmaster in charge, the business is still responsible for making sure the split is fair.
Can I see how my share was worked out?
Yes. You can ask for details of how tips were handled and shared while you worked there, going back up to 3 years. Your employer and Troncmaster should also make available the Tipping Policy and tronc distribution rules.
You cannot request to see actual values that other members of staff have received, however.
Do we get a say in how it works?
Soon it’ll be the law. Under the Employment Rights Act 2025, businesses will have to consult staff (through a union, staff reps or directly) when they write the tipping policy and every time they review it.
Reviews will happen at least every 3 years, and everyone gets an anonymised summary of what was said. These rules were due on 1 October 2026 but have been delayed, and the government is now aiming for the end of 2026. Until then, the current Code of Practice still encourages businesses to ask staff.
I think my share’s wrong. What now?
Talk to the Troncmaster first. Most of the time it’s a mix-up over points or hours, and it can be sorted in minutes. If it isn’t, raise it through your workplace’s grievance process. As a last resort you can take a claim to an employment tribunal, usually within 12 months. A tribunal can order the business to fix the split or pay compensation.
Still got a question?
We’re Tips & Troncs, and fair tipping is what we do. We act as your independent Troncmaster, keep the records straight and make sure everyone on the rota gets what they’ve earned, on time. Your team gets peace of mind, and you get to focus on your guests.
Talk to us about your tronc scheme