Since 1 October 2024, employers in Great Britain must pass on all tips, gratuities and service charges to workers, without deductions other than tax, and share them fairly. They must also have a written tipping policy and keep a record of tips and how they were shared. The law does not set one method: splitting by hours worked is common.
1. Total the pool for the period your policy uses.
2. Add up the basis. For example, total hours worked by everyone sharing.
3. Share it. Each person gets pool × their hours ÷ total hours. Round down to the penny and hand out any pennies left over so the shares add up exactly.
Worked example. £600 of tips is shared by hours: Alex worked 30, Sam 20 and Jo 10 (60 in total). That is £10 an hour, so Alex gets £300, Sam £200 and Jo £100.
Frequently asked questions
Do employers have to give staff all the tips?
Yes, for qualifying tips, gratuities and service charges. Since 1 October 2024 employers must pass them all on to workers, without deductions other than tax, by the end of the month after the month the customer paid them.
Do I need a written tips policy?
Yes. The Code of Practice says employers must have a written policy on how tips are dealt with at their place of business and make it available to all workers.
Is it fair to split tips by hours?
It can be. The Code of Practice lists factors such as type of work, hours worked, seniority and individual and team performance. Your policy should explain the method.
Do agency workers get a share?
They must be taken into account. The Code of Practice says employers must consider agency workers when deciding a fair split, though that does not mean an equal share in every case.
Is National Insurance due on tips?
Tips paid through payroll are taxable. Whether National Insurance is due depends on how they are distributed, for example through an independent troncmaster. See HMRC’s E24 guidance.
Read next
- GuideTips and tronc: what the law requires of employers
- GuideMinimum wage rates from April 2026
- CalculatorFood Temperature Checker (Fridge, Freezer, Hot Hold, Cooking)
Sources
- Code of practice on fair and transparent distribution of tips – GOV.UK
- Employment (Allocation of Tips) Act 2023 – legislation.gov.uk
- E24: tips, gratuities, service charges and troncs – GOV.UK
Great Britain. This does the arithmetic only: whether a split is fair depends on your written policy and the Code of Practice.
General guidance, not legal or tax advice. Last checked 4 November 2026 against the sources above.