TLDR
- A tronc is a pot for tips, gratuities and service charges that someone other than the employer shares out. Tips and optional service charges shared out through a tronc carry no National Insurance if either of the two conditions in E24 section 8 is met: the troncmaster allocates money that was never paid to the employer and the employer does not pay it on to staff, or the employer does not determine the allocation. A mandatory service charge paid out to staff always carries it.
- Since 1 October 2024, in England, Scotland and Wales, every tip and service charge must reach staff in full. It must be paid by the end of the month after the guest paid, under a written policy every worker can see.
- Guests notice the service charge too. In booteek's analysis of UK Google reviews (measured October 2026), reviews that mention it average 2.9 stars, against 4.6 for all reviews.
Dev took a chef's job at a London restaurant. His offer was minimum wage plus a share of the service charge, which he was told "works out" at roughly £14.50 an hour. Three weeks in, he had not had his first pay. He has run two kitchens, and he thinks tips should be a bonus on top of a wage, not part of it. What he could not do was work out whether the job would pay his bills, because he could not calculate what the service charge would add.
Dev's story is based on an account a chef shared on Reddit. We changed his name to protect him.
That is one chef's account, not a trend. But it names the question a restaurant or bar has to answer in writing: where does the service charge go, who shares it out, and when does it land? A tronc is one way to answer it.
What does tronc mean?
A tronc is a pay arrangement for sharing out tips, gratuities and service charges. HMRC's guide E24 calls it "a special pay arrangement used to distribute tips, gratuities and service charges".
The person who runs it is the troncmaster. HMRC defines them as "the person, other than the employer, responsible for arrangements to share tips among employees". It can be one of your own team. In HMRC's own example, a head waitress collects the tips and shares them out each week, and that makes her the troncmaster. In another, the staff elect one of their colleagues to the role.
How does a tronc work?
In a tronc, a troncmaster, not the employer, is responsible for sharing out the tips. How much say the employer has in that decides the National Insurance.
E24 section 8 says payments of tips do not attract National Insurance if either of two conditions is met. The first is that "troncmaster is allocating money that originally was not paid to the employer and the employer does not pay the money directly or indirectly to their employees". The second is that the "employer does not determine, directly or indirectly, the allocation of those tips". If neither is met, National Insurance is due, and the employer must calculate and pay it. The troncmaster, HMRC says, "is personally responsible for all aspects of operating a PAYE scheme". That scheme must be "entirely independent of the employer's scheme", unless the employer, a business partner or a company official is the troncmaster, in which case HMRC says payments go through the employer's payroll. HMRC also puts PAYE on the employer where "the employer is involved in deciding the distribution of tips amongst employees" or where "mandatory service charges are distributed through the tronc". If you set up a tronc, the employer must tell HMRC, unless it started before 6 April 2004.
What is tronc pay, and is it taxed?
Tronc pay is the money a worker receives out of the tronc. Income tax is due on it through PAYE. National Insurance depends on the kind of money and on whether either E24 condition is met. Three of the cases in E24:
| How the money is shared | National Insurance | Income tax |
|---|---|---|
| A mandatory service charge paid out by the employer | "always due on the payments" | Due |
| Tips a guest hands straight to staff, with no employer involvement | "no National Insurance contributions will be due" | Due |
| Tips and optional service charges through a tronc, where either E24 condition is met | Not due | Due, through PAYE |
Does tronc pay show on a payslip? E24 does not say. It sends payments through the employer's payroll in some cases and through the troncmaster's separate PAYE scheme in others, so ask your accountant how yours should appear. Setting up or changing a scheme? Have you read E24 in full?
Is a service charge mandatory in the UK?
A service charge is mandatory when the guest is obliged to pay it, and voluntary when they are not. HMRC's E24 draws the line there: where "there is an obligation to pay, the payment is a mandatory service charge". National Insurance is always due on a mandatory service charge paid out to staff, however it is shared.
What does UK law say about tips and service charges?
Employers must pass every tip and service charge on to staff. The Employment (Allocation of Tips) Act 2023 made that law on 1 October 2024 in England, Scotland and Wales, but not in Northern Ireland, with a statutory code of practice. Four duties matter most:
- Pass it all on. Employers must "pass on all tips and service charges to workers without deductions", except in very limited cases such as income tax.
- Pay it on time. Tips must reach staff "by the end of the month following the month in which the tips are paid by customers".
- Write it down. Keep "a written policy on how tips are dealt with" and make it available to every worker. "All staff should have the same access to the written policy."
- Keep the records. Tipping records must be kept for three years. A worker can ask in writing to see the tipping record, once every three months, for up to three years back.
A tronc does not move the responsibility. The code says the employer "remains liable for the fairness and transparency of the scheme", even when a troncmaster runs it. If the employer appoints an independent tronc operator, sets its framework in line with principles of fairness, and reasonably believes the tronc is operating independently and fairly, the code says the employer will be regarded as having complied.
A worker who thinks the rules were broken can go to an employment tribunal, which can make a public declaration and order compensation.
Do tips count towards the minimum wage?
No. HMRC's E24 says amounts an employer pays a worker that represent tips, gratuities, service charges or cover charges paid by customers "do not count towards National Minimum Wage pay."
So the minimum wage has to be met by hourly pay alone.
What should a written tipping policy say?
It should say, in plain words, how the pot is shared and when it is paid. The code lists factors an employer may use, and says the list is "illustrative rather than exhaustive":
- type of role, such as bar, front of house and kitchen
- basic pay
- hours worked while the tips came in
- individual or team performance
- seniority
- length of service
- what the guest meant the tip for
A policy that names them shows a new starter, in week one, what his share is based on and when it lands. Could a new starter like Dev work out his pay from yours?
How do guests feel about a service charge?
They notice it, and the reviews that mention it are far harsher than the rest. In booteek's analysis of Google reviews with text at UK restaurants and bars (measured October 2026), reviews that mention a service charge average 2.9 stars, against 4.6 for all reviews. About 4 in 10 of them are one- or two-star, against fewer than 1 in 10 of all reviews.
One review means nothing. Hundreds of them, across hundreds of venues, is a direction.
The limits matter. This is the sample of reviews booteek holds for UK restaurants and bars in the cities we track, chains included, and it leans on Manchester. It counts every review that mentions a service charge, for or against. It does not show whether the charge caused the low score.
What is changing next?
The Employment Rights Act 2025 will make it mandatory for employers to consult their workers when they write or revise a tipping policy. A revised code was laid before Parliament and then withdrawn on 29 July 2026 so it can go out to a new consultation. Until it is in force, the government says employers "should continue to follow the existing code of practice." There is no start date yet.
How do your reviews compare with venues near you?
A Competitor Check shows how your Google profile and reviews compare with the venues near you. The reviews in this post show that guests do write about the service charge, and it is one of many things they raise. And that is where booteek helps: Competitor Check is a one-off report on your Google profile, your reviews and how you compare with your top five local competitors, ready in a few minutes. It gives no tronc or tax advice.
Does your written tipping policy name who shares the pot and when it is paid? Can every member of your team see it?
Your team shouldn't need a calculator to find their pay! Write the pot down, show the split, say when it lands.
Where do these figures come from?
- booteek's study of service-charge reviews (booteek, measured October 2026). The sample is 53,022 Google reviews with text at 2,481 UK restaurants and bars, each counted once, chains included, from the cities booteek tracks, and it leans on Manchester. The reviews were captured in 2026 and published between 2011 and October 2026. A review counts when it contains the words "service charge", for or against: 345 reviews at 232 venues. It shows how those reviews score, not why. There is no public page for it yet.
- Code of practice on fair and transparent distribution of tips (Department for Business and Trade, published 29 July 2024; applies to England, Scotland and Wales) — passing on all tips, the payment deadline, the written policy, three years of records, the allocation factors and troncmasters. GOV.UK tipping code
- Guidance on tips, gratuities, service charges and troncs, E24 (HM Revenue & Customs, updated 18 July 2025) — the definitions of tronc and troncmaster, National Insurance for each way of sharing tips, the minimum-wage rule and telling HMRC about a tronc. HMRC E24
- Employment (Allocation of Tips) Act 2023 (legislation.gov.uk) — the law behind the code, in force from 1 October 2024. The Act
- Distributing tips fairly: revised statutory code of practice (GOV.UK, updated 29 July 2026) — the duty to consult staff, and the revised code's withdrawal for a new consultation. Revised code