The situation varies depending on whether employees keep tips handed to them by customers, or the employer shares out pooled tips. It also depends on whether or not customers are required to pay a mandatory service charge (ie a service charge that is added to the customer’s bill without a clear indication that it is voluntary).

This factsheet looks at the tax and National Insurance framework surrounding tips, service charges and troncs. It also explains how tips and service charges relate to the National Minimum Wage and provides sources of further information.