Tipping and Service Charge Policy

A written tipping policy that meets the Employment (Allocation of Tips) Act 2023 and statutory Code of Practice, with allocation options, tronc set-up, tax treatment, records and worker requests.

Editable Word document
14
10pages
Guidance notes included
aml consultancy solutions

Hospitality & food

Tipping and Service Charge Policy

About this document

What it’s for

The written tipping policy that UK employers must have where tips, gratuities or service charges are received other than occasionally and exceptionally. It explains how all tips are passed to workers in full, how they are shared fairly, when they are paid, how tax and NIC apply, and how workers can see the tipping record.

When to use it

  • Any café, restaurant, pub, bar or takeaway that receives tips by card, cash, service charge or online
  • When setting up or reviewing a tronc or tips pool
  • When you consult staff on tips, as the Employment Rights Act 2025 will require

What’s inside

The document is laid out in the sections below. Each one comes with a plain-English guidance note explaining what it does and what to change.

  1. Purpose and commitment
  2. Legal framework
  3. Scope
  4. Definitions
  5. How tips are received
  6. No deductions
  7. Allocation method
  8. When tips are paid
  9. Service charges and communicating with customers
  10. Tax and national insurance
  11. Records
  12. Consultation and review
  13. Information for workers
  14. Questions, concerns and complaints

Also included

  • Part A – Points per hour (Option A)
  • Part B – Worked example (Option A)
  • Part 1 – Daily tips sheet
  • Part 2 – Allocation period summary
  • Part 3 – Allocation to workers
  • Employer response (to be given within four weeks)

How to complete it

  • Choose your allocation method (Option A, B or C) in section 7 and complete Schedule 1
  • Fill in the payment dates and the troncmaster details, if you use one
  • Consult your staff on the draft (section 12) and record it in Schedule 4
  • Give a copy to every worker, including agency workers, and keep the tipping record in Schedule 2

Key points to check

  • The revised statutory Code of Practice and the consultation duty – see the note in section 2
  • Take payroll advice before setting up a tronc: the NIC saving only applies if it is genuinely independent

Our templates are professionally structured starting points for UK businesses, not legal advice. For anything complex, unusual or high-value, have your final version checked by a solicitor.

Included in the pack

Hospitality & food

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Editable Microsoft Word files

Guidance notes in every document

Written for UK businesses

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