Entitlement to tips and service charge

Short answer

Since 1 October 2024, if you are a worker in England and Wales, you are generally entitled to a fair share of the tips, gratuities and service charges that your employer receives, and your employer is not allowed to keep them or make deductions from them (other than tax). This comes from the Employment (Allocation of Tips) Act 2023, often called the Tipping Act, and the statutory Code of Practice that took effect on the same date. Whether you personally receive a share, and how much, depends on the type of payment, how it is paid, your working arrangements, and what a fair allocation looks like at your workplace.

What the Tipping Act covers

The Act applies to what it calls qualifying tips. These are tips, gratuities and service charges that are either received by the employer, or over which the employer exercises control or significant influence. In practice this covers:

Card tips and service charges that go into the business account before being distributed.

Service charges added to the bill, whether described as discretionary or otherwise, where the employer controls the money.

Any tips where the employer decides or influences how they are shared out.

Cash tips that a customer hands directly to you, and which you keep, are generally outside the Act, because the employer does not control that money. In that situation the tip is simply yours, subject to your own tax position and to any lawful and agreed tronc arrangement you have joined.

Discretionary versus mandatory service charge

The label on a service charge matters less than who controls the money. A service charge added to the bill will normally fall within the Act if the employer receives or controls it. The Code treats an amount added before the bill is presented as a voluntary service charge only if it is made clear to the customer that it is discretionary. Either way, if the employer controls the funds, the Act requires fair allocation to workers rather than the business keeping it. So a common past practice of the business retaining part of the service charge as revenue is no longer permitted for qualifying tips.

Your core entitlements under the Act

The main protections you now have are:

1. Fair allocation. The total qualifying tips at a place of business must be allocated fairly between the workers at that site, and the employer must have regard to the statutory Code of Practice when deciding what is fair.

2. No unlawful deductions. The employer cannot deduct amounts such as card processing fees or administrative charges from qualifying tips. The money must be passed on in full, subject only to normal tax and National Insurance treatment.

3. Prompt payment. Qualifying tips must be paid to workers by the end of the month following the month in which the customer paid the tip.

4. Coverage of agency workers. Eligible agency workers at a site should be included in the fair allocation, not excluded simply because they are engaged through an agency.

5. Transparency. Where tips are paid more than occasionally, the employer must have a written tips policy that is available to workers, and must keep records of how tips have been dealt with.

6. Right to request records. You can make a written request to see the tipping record covering a period in which you worked, and the employer must respond.

What a fair allocation actually means

Fair does not automatically mean an identical split. The Code allows employers to take into account legitimate factors when deciding shares, provided the overall approach is fair and not discriminatory. Factors that can properly be considered include the type of role, basic pay, hours worked during the relevant period, individual and team performance, seniority, length of service, and customer intention where a customer indicated a tip was for a particular person. The key requirements are that the method is fair, transparent, applied consistently, and free from unlawful discrimination. An arrangement that funnelled tips only to certain favoured staff, or that excluded people on protected characteristics, would be open to challenge.

Troncs

Many hospitality businesses run a tronc, which is an arrangement where an independent troncmaster distributes tips among staff. The Act permits fair allocation through an independent tronc, and using a genuinely independent tronc operator can be treated as a fair method of distribution. There can also be tax advantages to a properly run tronc. If your workplace uses a tronc, your entitlement flows through that scheme, and the scheme itself still has to operate fairly and transparently.

Facts that will change the answer for you

To know exactly what you are entitled to, the following matters:

Your status. The protections apply to workers, which includes most employees and many casual and zero-hours staff, and eligible agency workers. If you are genuinely self-employed and not a worker, the position is different.

The type of payment. Employer-controlled card tips and service charges are covered. Cash tips you keep yourself usually are not.

Timing. The statutory duties apply to tips paid by customers on or after 1 October 2024. Complaints about earlier periods rest on your contract and older legal principles rather than the new duties.

Your workplace policy and tronc rules. These determine how the fair share is calculated in practice, and you are entitled to see the written policy and the relevant records.

Practical next steps

1. Ask to see the written tips policy and, if you want to check what has happened, make a written request for the tipping records for the periods you worked. Keep a copy of your request and the date.

2. Keep your own evidence. Note the shifts you worked, any service charge shown on bills, and what you have actually received, so you can compare it against the policy.

3. Raise it informally first. Many issues are misunderstandings about how the tronc or allocation method works, and a calm conversation with your manager or the troncmaster often resolves it quickly.

4. If that does not work, put a clear written grievance to your employer setting out the amounts you believe you are owed, the period, and why you say the allocation is unfair or that deductions have been made.

5. If it remains unresolved, you can bring a claim in the employment tribunal. The Act gives workers the right to complain to the tribunal where an employer has failed to allocate tips fairly or has breached the tips rules, and the tribunal can order the employer to comply, and can order payment to you and in some cases compensation. There are time limits for tribunal claims, so do not delay, and consider contacting Acas about early conciliation, which is normally a required step before a tribunal claim.

Where to get authoritative detail

The full rules are in the Employment (Allocation of Tips) Act 2023 and the statutory Code of Practice on fair and transparent distribution of tips on GOV.UK. Acas provides clear practical guidance on tips, service charges, policies and records. These will confirm the current position and the exact procedure for requesting records and challenging an unfair arrangement.

If you tell me your job status, whether the tips are card or cash, whether your workplace uses a tronc, and what you are currently receiving compared with the written policy, I can give you a more precise view of what you should be getting and the strongest way to challenge it.