Tronc scheme: fair tips under UK law

· Tiproll · 5 min read

A tronc scheme is a way some Great Britain employers pool tips, gratuities and service charges and share them among staff. The word is old. The rules are not. Since 1 October 2024 the Employment (Allocation of Tips) Act 2023 and the statutory Code of Practice have required every qualifying tip to be passed on and allocated fairly, and, where tips come in more than occasionally, a written tipping policy and records. A tronc does not sit outside that law.

This is information, not legal advice. Acas can help for free. For your own situation, speak to an employment solicitor. The law covers Great Britain only (England, Scotland and Wales), not Northern Ireland. Sources below were checked in October 2026.

What a tronc is

In practice a tronc is a pot. Card tips, cash tips and optional service charges go in. A person (often called a troncmaster) or a set of rules then shares the pot. HMRC’s E24 guide describes troncs in general terms for tax and National Insurance. That is general information only. It is not tronc or NI advice. Read HMRC E24.

The 2023 Act still applies. Qualifying tips must go to workers. They must be allocated fairly. They must be paid by the end of the month after the month they were paid by the customer. See GOV.UK: Distributing tips fairly and the Employment (Allocation of Tips) Act 2023.

Fair allocation, not rounding

Fair does not mean equal if your policy says otherwise. It does mean the method in your written policy, applied the same way, with every penny accounted for. Spreadsheets that round away pence fail that test.

Worked example (labelled, not a real venue). June card tips: £1,247.60. Four workers share by hours worked that month: 38, 32, 40 and 28 hours (138 hours in total). £1,247.60 ÷ 138 = £9.040579… per hour.

  • Worker A: 38 × £9.040579… = £343.54
  • Worker B: 32 × £9.040579… = £289.30
  • Worker C: 40 × £9.040579… = £361.62
  • Worker D: 28 × £9.040579… = £253.14

Check: £343.54 + £289.30 + £361.62 + £253.14 = £1,247.60. Paid by 31 July. That is the standard the Code expects: transparent, to the penny, on the record.

How to set up a tronc scheme

You do not have to call it a tronc. You do have to meet the Act. A practical sequence for owners and managers of pubs, restaurants, cafés, hotels, salons, barbers and taxi firms:

  1. Decide what goes in the pot (card tips, cash, optional service charge). An automatic (compulsory) service charge counts too, whatever you call it: it must be passed on and shared in the same way.
  2. Write a tipping policy in plain English. Say who is eligible, the method (hours, points, a mix), when you pay, and how someone can ask for records.
  3. Tell workers about the policy. From the Employment Rights Act 2025, duties to consult workers, share an anonymised summary and review at least every three years are coming in, expected by the end of 2026. GOV.UK has not yet confirmed a commencement date, so treat them as forthcoming until it does.
  4. Allocate every pot the same way, to the penny. Keep the working.
  5. Keep records for three years. If a worker asks for their records, reply within four weeks, counting the day you received the request.

A tribunal can award compensation of up to £5,366 per worker for failures from 6 April 2026 (it was £5,000), on top of any tips owed. See Employment Rights Act 1996, section 27M. Before a claim, a worker must contact Acas for early conciliation.

Taxi firms and salons are in scope when the business receives the tips, or controls or significantly influences how they are shared. Genuinely self-employed workers, such as some salon chair renters, are not covered. The same written policy, fair split and records apply. Sector pages such as https://tiproll.co.uk/for/hospitality set out the same duties in that context.

Written policy and records

A written policy is the clearest way to show your split is fair. The Code expects workers to be able to understand how their share was worked out. Locked records for three years are part of that. Tiproll is built for that: a written tipping policy, anonymous staff consultation, penny-exact allocation and three years of records. Fair tips, on the record.

Do not invent a method after the month has closed. Do not mix employer money with the tip pot. Do not delay payment past the statutory deadline.

Tax and National Insurance in outline only

Tips can affect tax and NI depending on how they are paid and whether a tronc is recognised. That is a matter for HMRC’s published guides, not for this post. Read E24. This is not tax or NI advice.

Where this leaves you

If you already run a tronc, check it against the 2023 Act and the Code: written policy, fair method, next-month payment, three-year records. If you are setting one up, start with the policy and the maths, not the label. Consultation and a three-year review are expected to become duties by the end of 2026.

For a step-by-step legal checklist, use https://tiproll.co.uk/tipping-law. When you want the policy written and the consultation run properly, Tiproll’s Policy Pack is the one-off route that matches this work.

This is information, not legal advice. Acas is free. An employment solicitor can advise on your facts.

Questions people ask

Does a tronc scheme replace the 2023 tipping Act?

No. A tronc is a way of pooling and sharing. The Employment (Allocation of Tips) Act 2023 and the statutory Code still require fair allocation and payment by the end of the following month and, where tips come in more than occasionally, a written policy and records. See GOV.UK: Distributing tips fairly.

How do I set up a tronc scheme in a small pub or salon?

Write a clear policy, decide the fair method, tell the team, split every pot to the penny and keep three years of records. Consultation, an anonymised summary and a review at least every three years are expected under the Employment Rights Act 2025 by the end of 2026 (date not yet confirmed on GOV.UK). This is not legal advice.

Must every penny of the tronc go to workers?

Qualifying tips must be allocated to workers fairly under the Act. Rounding that leaves money with the business is not fair allocation. Use a method you can show in writing and in the figures.

What if a worker asks for their tip records?

Reply within four weeks, counting the day the request was received. Keep records for three years. Failures from 6 April 2026 can attract a tribunal compensation cap of £5,366 per worker on top of tips owed (Employment Rights Act 1996, section 27M; GOV.UK's guidance still shows the old £5,000).

Does this apply to taxi firms and Northern Ireland?

The Act covers Great Britain only, not Northern Ireland. Taxi and private hire firms in GB are in scope when they receive tips or control how they are shared, for drivers who are workers (genuinely self-employed drivers are not covered). For your own case, Acas (free) or an employment solicitor can help.