Tip pooling

Tip pooling (also known as a tronc system) is a method of distributing tips, gratuities, and service charges among staff. Tips are collected centrally and shared according to a agreed policy, rather than each employee keeping their own tips.

Under the Employment (Allocation of Tips) Act 2023, employers in the UK must:

• Pass all tips and service charges to workers without deductions
• Distribute tips fairly and transparently
• Maintain a written tipping policy
• Keep records of tip distribution for three years

A tronc system is typically managed by a tronc master or tronc committee who decides how tips are allocated. Tips distributed through a formal tronc are not subject to National Insurance contributions, making it tax-efficient.

Tip pooling is common in restaurants, hotels, pubs, and other hospitality venues where multiple staff contribute to the guest experience.