- Passed on in full
- Shared fairly
- Paid on time
- The three promises of the Tipping Act
IN FULL
No deductions
Employers must pass on all tips and service charges to workers without deductions, except in very limited cases such as income tax.
Check a tipWHAT THE TIPPING LAW SAYS
Your tip,
their table.
A tip is meant for the people who served you.
Since 1 October 2024, the Employment (Allocation of Tips) Act has made that the rule in England, Scotland and Wales: tips an employer handles must go to workers, fairly and without deductions. Here is what that covers, and what servers can ask for.
ALL TIPS to the staff
Check a tip
THE SHORT ANSWER
Tips the business handles
belong to the staff.
The Act covers tips, gratuities and service charges
that an employer receives or controls.
ON TIME
By the end of next month
Tips must reach staff by the end of the month after the customer paid them. A tip left on 23 June must be paid out by 31 July at the latest.
See the numbers
CASH
Cash kept is the server's
A cash tip a worker receives and keeps, with no employer involvement, is outside the Act. Once a manager collects and shares cash, it is covered.
What servers can askGeneral information only, not financial advice. For advice on your own situation, speak to a regulated financial adviser or a free money-advice service.
A QUICK TIP CHECK
Does the tipping law
cover this tip?
Pick how a tip was left to see whether the Tipping Act's rules on fair, full and timely payment apply. The bar shows how far the employer's duties reach.
Based on the statutory code of practice on the fair and transparent distribution of tips (England, Scotland and Wales). General information, not legal advice.
TWO NUMBERS WORTH KNOWING
Every penny passed on,
every share on record.
What the law says must reach workers,
and how long the paper trail must be kept.
100%
Share of qualifying tips passed to workers
All tips and service charges the employer receives or controls go to workers without deductions, except in very limited cases such as income tax.
THE TIPPING ACT
3 years
How long an employer must keep them
The record must show all qualifying tips received at the workplace and the amount allocated to each worker, kept for three years from the date each tip was paid.
TIPPING RECORDS
A revised code, prompted by the Employment Rights Act 2025, will require employers to consult workers when writing or revising a tipping policy. It is going to a new public consultation; for now, employers should follow the existing code.
IF YOU WAIT TABLES
Four things you
are entitled to ask.
The code gives workers, including agency workers, practical ways to check that tips are handled fairly. These are the main ones.
Read the written tipping policy
Where tips are more than occasional, the employer must have a plain-language written policy on how tips are accepted, shared and paid, and make it available to all workers.
Know the payment deadline
Tips must be paid out by the end of the month after the month the customer paid them.
Ask for the tipping record
In writing, once every three months, you can ask to see the record for up to three years back: total tips received and the amount paid to you.
Raise it, then escalate
Use the workplace grievance process first; Acas gives impartial advice. Unresolved complaints can go to an employment tribunal.
HOW TIPS ARE SHARED
Fair does not
mean equal.
The code says fair sharing does not require the same share for everyone, but employers must consider all workers involved in serving customers, including agency workers, and use clear, objective factors such as role, hours worked, seniority or customer intention, stated in the policy.
Many workplaces use a tronc: a common fund where tips are pooled before being shared out, sometimes run by an independent troncmaster. Tips do not count towards the National Minimum Wage, and workers still pay Income Tax on them.
Questions
Questions people ask
Does a restaurant have to give staff the service charge?
Yes. The Employment (Allocation of Tips) Act 2023 covers service charges, both automatic and voluntary, as well as tips. They must be passed to workers without deductions, except in very limited cases such as income tax.
When must tips be paid to staff?
By the end of the month following the month the customer paid. The code's example: a tip left on 23 June must be distributed by 31 July at the latest.
Can my boss keep part of the tips for card fees?
The code says all tips must be passed on without deductions, except in very limited scenarios, such as deduction of income tax.
Do tips count towards the minimum wage?
No. GOV.UK says tips do not count towards the National Minimum Wage. Workers still pay Income Tax on tips and may have to pay National Insurance.
What can a tribunal do if tips are not shared fairly?
It can declare the complaint well founded, order the employer to revise an allocation or to pay workers, and award compensation of up to £5,000 per worker for financial loss.
References
- GOV.UK: Tips at work
- Department for Business and Trade: Code of practice on fair and transparent distribution of tips
- Department for Business and Trade: Distributing tips fairly, non-statutory guidance for employers
- GOV.UK: Distributing tips fairly, revised statutory code of practice
- legislation.gov.uk: Employment (Allocation of Tips) Act 2023