WHY Hospitality®

Hospitality glossary · Money and margin

What is a tronc?

A tronc is a separate pay arrangement for pooling and sharing tips, gratuities and service charge among staff. A troncmaster, not the employer, decides how the money is shared out.

Split a tip pool by hours and weighting All 52 terms

In practice

Tronc in a real operation.

Definitions are easy. What matters is how the thing behaves in a real operation, and where it tends to go wrong.

What it looks like in a UK hospitality business

Tronc payments are taxed through PAYE, and the troncmaster is responsible for running that PAYE scheme. They do not attract National Insurance as long as the employer does not decide, directly or indirectly, who gets what. That is the main reason a tronc exists, so the troncmaster's decisions have to be their own in fact and not only on paper. The employer must tell HMRC about a new tronc. Since 1 October 2024, under the Employment (Allocation of Tips) Act 2023, employers must also pass all tips to workers without deductions, share them fairly, keep a written tipping policy that all staff can see, and pay tips out by the end of the month after the customer left them. Tips never count towards National Minimum Wage pay.

The mistake operators make

A manager quietly steering who gets what. The moment the employer influences allocation the National Insurance treatment can fall away, and the liability is retrospective rather than forward-looking.

Questions

Tronc, answered.

Something here that doesn’t match what you’re seeing in your own business? That is usually worth a conversation rather than another article.

What does tronc mean in hospitality?

A tronc is a separate pay arrangement for pooling and sharing tips, gratuities and service charge among staff. A troncmaster, not the employer, decides how the money is shared out. Tronc payments are taxed through PAYE, and the troncmaster is responsible for running that PAYE scheme. They do not attract National Insurance as long as the employer does not decide, directly or indirectly, who gets what. That is the main reason a tronc exists, so the troncmaster's decisions have to be their own in fact and not only on paper. The employer must tell HMRC about a new tronc. Since 1 October 2024, under the Employment (Allocation of Tips) Act 2023, employers must also pass all tips to workers without deductions, share them fairly, keep a written tipping policy that all staff can see, and pay tips out by the end of the month after the customer left them. Tips never count towards National Minimum Wage pay.

What do operators get wrong about tronc?

A manager quietly steering who gets what. The moment the employer influences allocation the National Insurance treatment can fall away, and the liability is retrospective rather than forward-looking.

Related terms

Worth reading next.

Service charge

A service charge is an amount a restaurant or other venue adds to a customer's bill on top of the price of the food and drink, usually 10% or 12.5%. It can be discretionary, which the customer can ask to remove, or mandatory.

Employee engagement

Employee engagement is how committed people are to the work and to the business. An engaged team member cares about the result, not only about being present and doing what they are told.

WHY Hospitality

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