The tips law
- Employers must pass on all tips, gratuities and service charges to workers, without deductions (apart from tax).
- Tips must be shared fairly, and paid by the end of the month after they were received.
- Employers must have a written tips policy and make it available.
- Employers must keep tips records for three years, and you can ask for yours.
Tips and the minimum wage
Tips can't count towards the minimum wage. Your basic hourly pay must reach the minimum on its own.
Track your tips
Note the tips or tronc you receive each week. It helps you check your share is fair and that you've received everything the policy says.
A worked example
A restaurant adds a 12.5% service charge to £40,000 of food and drink in a month, which is £5,000. Under the tips law, all £5,000 must be shared among workers, fairly and according to the written policy. The employer can't keep anything to cover card fees.
If the policy shares by hours worked and you worked 120 of the 2,000 staff hours that month, your share would be £300, paid through payroll by the end of the next month.
Asking for your tips record
You can make a written request for information about tips at your workplace. The employer must reply within four weeks. If tips have been kept or shared unfairly, you can bring a claim to an employment tribunal, usually within three months.
Cash tips in your hand
Cash tips given straight to you and kept by you are yours. You're responsible for paying tax on them, usually through your tax code. The tips law covers cash tips the employer controls or collects, such as a shared tip jar.
Keep your own record
Shiftaan works out your hours and expected pay for every shift, even ones that cross midnight. Open the app.
Common questions
Can my employer keep part of the service charge?
No. Under the law in force since 1 October 2024, all tips and service charges must be passed on to workers, apart from tax deductions.
How fast must tips be paid?
By the end of the month after the month in which the customer paid them.