UK Legislation Mandates Full Tip Distribution To Workers
The Employment Allocation of Tips Act 2023 mandates that UK employers pass 100% of service charges and tips to workers without deductions. This requirement became effective on October 1, 2024. Under the act, Tronc arrangements serve as a compliant method for distributing these funds. Tronc payments are generally exempt from national insurance if managed by an independent tronc master, though income tax still applies. Employers may use a separate compliant pay arrangement known as a TRNC to distribute these funds.
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Sources · 7 independent
LBC London
“the Employment Allocation of Tips Act 2023 requires UK employers to pass 100% of service charges and tips to workers free of deductions.”
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