Sharing tips fairly and paying casual staff without a claim

Written for owners of restaurants, cafes and coffee shops, pubs and bars, takeaways and delivery kitchens, food trucks and bakeries with seating, anywhere in the UK.

The short version

1. Write the tipping policy down.Say what it covers, who shares and on what basis, who the troncmaster is and when tips are paid.
2. Pass tips on whole, through an independent troncmaster.Card fees are a business cost. Someone like a senior waiter runs the split on the tronc's own PAYE scheme, without management.
3. Cost every casual hour with holiday pay included.Add holiday pay, employer NIC and pension to the wage. A casual hour costs well above the rate you agreed.

Tips are a big part of what your team takes home and the part most likely to start a dispute. Under the 2023 tips law, qualifying tips must be shared fairly and paid out on time, and the employer keeps nothing. Casual and zero-hours staff are at least workers, with holiday, minimum wage and pension rights, so their real hourly cost is well above the rate you agreed. This lesson covers Great Britain: Northern Ireland has no tips allocation Act and different holiday rules, so check the nation first.

Designing the tipping policy

• Who may share: front and back of house, kitchen porters, chefs and supervisors, if the allocation is fair. Managers who work shifts can share on the same basis.
• How to split: points per role times hours is the easiest to defend. Equal per hour, or a front and back of house split then points, also work. Write it down and do not change it mid-period.
• Put in writing: what is covered (card tips, service charge, cash), who shares and on what basis, the troncmaster, payment timing, records kept 3 years, when you will next review it, and how to raise a query.

Running the tronc

A tronc is a pooled tips fund shared out by a troncmaster. Keep it in a separate account. Record tips in by day and payment type, have the troncmaster sign each allocation run, export it to payroll, and reconcile it to the EPOS tip report every period. The tronc runs on its own PAYE scheme.

Card fees cannot be deducted from tips, and a tronc controlled by management loses the NIC position that makes running it through payroll worthwhile.

What a casual hour really costs

Every casual and zero-hours worker gets a written statement of terms from day one. For irregular-hours and part-year workers, holiday accrues at 12.07% of hours worked in each pay period, and you may instead pay rolled-up holiday pay: 12.07% of pay, shown as a separate payslip line. Otherwise holiday is paid when taken, at a week's pay averaged over 52 weeks. As of Oct 2026.

Two dates to plan for now

• 30 October 2026: your duty to take reasonable steps to prevent sexual harassment of staff becomes a duty to take all reasonable steps, and it covers harassment by customers. Put a door policy, a refusal and ejection procedure and an incident log in place before then. A tribunal can add up to 25% to compensation where the duty was breached (Equality Act 2010 ss.40A and 124A). As of Oct 2026.
• 1 January 2027: the qualifying period for unfair dismissal falls from 2 years to 6 months where employment ends on or after that date, even if notice was given earlier, and service before that date counts (Employment Rights Act 2025 s.25). Take advice before any dismissal. As of Oct 2026.

Rota rules that catch late-night sites

• Rest: 20 minutes over 6 hours, 11 hours between shifts and 24 hours a week. A clopen, closing at 00:30 and opening at 07:00, breaks the 11 hours.
• Under-18s: at most 8 hours a day and 40 a week, and in pubs, restaurants and bars never between midnight and 04:00 (Working Time Regulations 1998 regs 5A and 27A). In a pub or bar, a 16 or 17-year-old can sell alcohol only if each sale is approved by a responsible adult (Licensing Act 2003 s.153). Ask your licensing solicitor how this applies to wine served with table meals.
• Right to work: check before the first shift. The civil penalty is up to £45,000 per illegal worker for a first breach and £60,000 for a repeat, and illegal working can also bring a licence review. Do not plan a hire around sponsorship: since 22 July 2025 cooks cannot be sponsored under the Skilled Worker route, and chefs generally only if they were already sponsored before that date. As of Oct 2026.

Asked in Greymill

Ask it about your own business

Paste this into Greymill with your own figures, and Staff & HR works it through for your business.

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