If you get tips at work, they do not count towards the National Minimum Wage, but you do have to pay tax on them.
How tips are paid
You could get your tips as:
- cash at the end of a shift or from a customer
- part of your pay packet
- an amount that’s pooled and shared between all staff – this is called a ‘tronc’ and the person who looks after it is called the ‘troncmaster’
How your employer handles tips
Practical guidance to help businesses give customers clear information on what happens to service charges, tips or gratuities.
Tips, service charges, gratuities and cover charges can not be used to make up national minimum wage pay. Workers entitled to the minimum wage must get at least the national minimum wage in base pay with any tips being paid on top.
This code of best practice aims to improve the information to customers and workers. It has advice for businesses on how to operate in a fair and transparent way and how to give customers enough information to make an informed choice before they leave a tip or gratuity or pay a service charge.
The government has a Code of Best Practice on tips that says how your employer should handle them.
It’s voluntary – your employer does not have to follow it – but if they do, they should have a policy on tips that includes information on:
- how tips are distributed, eg if a tronc is used
- if cash and card tips are treated differently
- the name of the troncmaster (if there is one)
- any deductions taken from tips
- what happens during leave, eg holidays, sick leave, parental leave
Where to get help
Contact Acas if you have a question about tips or the National Minimum Wage.
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