Tronc & Tips Calculator
Updated November 2026 · Free · No sign-up
Calculate tronc and tip shares — under the Employment (Allocation of Tips) Act 2023 (live since Oct 2024): 100% of tips must reach workers, allocated fairly, by the end of the following month — and a proper tronc saves everyone NI.
Quick answer: The law: employers must pass on ALL tips/service charges (no admin skims), allocate them fairly (written policy + 3-year records, workers can request their data), at the latest by the end of the month after the tip was paid. Via an independent tronc: tips escape employee AND employer NI (tax still applies).
The Act’s Rules (October 2024 Onward)
| 100% pass-through | Employer-received tips and service charges reach workers in full — card fees, admin charges, breakage deductions all unlawful |
| Fairness | Allocation per a written policy having regard to the statutory Code — role, hours, performance basis all usable; opaque favoritism isn’t |
| Timing | Paid by the end of the month following receipt — no quarterly holding |
| Agency workers | Included — the eligible-worker definition covers them |
| Records | 3 years; workers may request their allocation data (one request per 3 months); tribunal claims within 12 months |
The Tronc Advantage
An independent troncmaster allocating tips (employer uninvolved in the allocation) keeps them NI-free both sides — worth 8% to workers and 15% to the employer vs wage treatment; income tax still deducts via the tronc’s PAYE scheme. Employer-controlled allocation breaks the NI exemption — independence is the whole game.
Worked Example
£4,200 pot, your 40 of 400 points = £420 gross. Via tronc: minus ~20% tax → ~£336. As wages: minus 20% + 8% NI → ~£302 — the tronc saves £34 on this one distribution (and the employer ~£63).
Enforcement
Tips never count toward minimum wage — base pay must clear the floor alone. Non-compliance: tribunal orders to revise allocations + up to £5,000 compensation per worker per complaint. Cash tips handed directly to you were never the employer’s to allocate (declare them via self-assessment/tax code). Compare the US’s very different tip-credit world.
Frequently Asked Questions
Do employers have to pass on all tips?
Yes — 100%, with no deductions for card fees or admin, allocated fairly and paid by the end of the following month, under the 2023 Act in force since October 2024.
What is a tronc?
An independent tip-distribution scheme run by a troncmaster — when the employer stays out of allocation, tips escape employee and employer NI (tax still applies).
Can tips count toward minimum wage?
No — never; base pay must clear NMW on its own, and tips ride on top.
What counts as fair allocation?
A written policy applying the statutory Code’s factors (role, hours, performance...) consistently — workers can request their data and challenge at tribunal within 12 months.
Are agency staff included?
Yes — the Act’s eligible-worker definition covers agency workers at the venue.
✓ Formula verified • Last updated: November 3, 2026