When did the tipping law come into force?

1 October 2024. The Employment (Allocation of Tips) Act 2023 inserted the duties into the Employment Rights Act 1996; the statutory Code of Practice on Fair and Transparent Distribution of Tips explains what a fair allocation looks like.

Can an employer keep part of the tips?

No. The whole of the qualifying tips must be allocated fairly between workers, and the Code of Practice says without deductions except in very limited scenarios such as income tax. Tips are allocated between workers, so an owner who is not a worker of the business is not part of the allocation.

Does the law apply to cash tips?

It applies to qualifying tips: those the employer receives, and those workers receive that are subject to employer control. A cash tip handed to a worker and kept by them without employer involvement is outside the allocation duty; cash collected into a pool is inside it.

What can a worker do if tips are withheld?

Complain to an employment tribunal. The Act gives workers the right to bring a claim for a failure to allocate fairly, to pay on time, or to provide the records they asked for.

Is the Employment Rights Act 2025 tipping change in force?

No. Section 14 (consult workers on the policy, review it at least every three years) is marked prospective on legislation.gov.uk, and the revised code of practice laid for it was withdrawn so a new consultation can be held. The existing code still applies.

Tipping law UK: what employers must do (2026)

Since 1 October 2024, employers in England, Wales and Scotland must pass on every qualifying tip, gratuity and service charge to workers in full, allocate them fairly, pay them by the end of the month after the customer paid, have a written tipping policy where tips are more than occasional, and keep a record of every tip for 3 years that workers can ask to see. The rules are in Part 2B of the Employment Rights Act 1996, inserted by the Employment (Allocation of Tips) Act 2023, with a statutory Code of Practice on what "fair" means.

Open the tipping policy generator

The seven duties in one table

The law does not tell you which split to use. It sets the outcome (fair, complete, on time, written down, recorded) and the Code of Practice explains how to judge fairness. The tipping policy generator writes a policy that covers each of these points, clause by clause.

What the Employment (Allocation of Tips) Act 2023 requires
Duty	What it means	Where
Allocate fairly	All qualifying tips, gratuities and service charges at a place of business are allocated fairly between the workers there.	ERA 1996 s.27D
Pass on in full	No deductions, card processing fees included; only very limited ones such as income tax.	Code of Practice
Pay on time	No later than the end of the month after the month the customer paid.	s.27G
Written policy	Where tips are more than occasional: whether you require or encourage tips, and how they are allocated. Available to every worker.	s.27I
Keep records	How every qualifying tip was dealt with, kept for 3 years.	s.27J
Answer requests	A worker may ask for the records once every 3 months; you reply within 4 weeks.	s.27J
Tronc (optional)	An independent tronc operator can make the allocation, if it is fair to use one.	s.27F

What counts as fair

The statutory Code of Practice (paragraph 23) lists the factors an employer may take into account:

Type of role / work for example distribution between front of house and backroom workers
Basic pay (and how workers are engaged)
Hours worked during period when tips are received
Individual and/or team performance
Seniority / level of responsibility
Length of time served with the employer
Customer intention

It also says the rules apply to eligible agency workers, and that the same fairness applies where permanent, directly recruited, agency and zero-hours workers work side by side. The guide to splitting tips compares four common methods on the same pool.

Deadlines and records

A tip a customer pays on 3 March must reach the worker by 30 April. Records show, for each place of business, the qualifying tips paid and how they were allocated, directly or through a tronc; keep them for 3 years. A worker can ask in writing for the records about their own tips and the total at their workplace, for one month or several consecutive months in the last 3 years, once every 3 months, and you reply within 4 weeks.

What is changing, and what is not yet

The Employment Rights Act 2025 (section 14) will require employers to consult workers or their representatives before the first policy, to review it at least once every three years, and to share an anonymised summary of the views. It is not in force. The revised code of practice written for it was withdrawn after being laid before Parliament, so that a new public consultation can be held; until then, gov.uk says to follow the existing code.

Sources

Duty in force from: legislation.gov.uk, Employment Rights Act 1996 s.27I (annotation): in force 1 October 2024 by the Employment (Allocation of Tips) Act 2023 (Commencement No. 2) Regulations 2024 — https://www.legislation.gov.uk/ukpga/1996/18/section/27I, read on 2026-09-29
Fair allocation: Employment Rights Act 1996 s.27D(1), legislation.gov.uk — https://www.legislation.gov.uk/ukpga/1996/18/section/27D, read on 2026-09-29
No deductions: Code of Practice on Fair and Transparent Distribution of Tips (published 29 July 2024), gov.uk — https://www.gov.uk/government/publications/distributing-tips-fairly-statutory-code-of-practice/code-of-practice-on-fair-and-transparent-distribution-of-tips-html-version, read on 2026-09-29
Payment deadline: Employment Rights Act 1996 s.27G, legislation.gov.uk — https://www.legislation.gov.uk/ukpga/1996/18/section/27G, read on 2026-09-29
Written policy: Employment Rights Act 1996 s.27I(1) and (3), legislation.gov.uk — https://www.legislation.gov.uk/ukpga/1996/18/section/27I, read on 2026-09-29
Records kept: Employment Rights Act 1996 s.27J: a record of how every qualifying tip, gratuity and service charge has been dealt with, kept for three years, legislation.gov.uk — https://www.legislation.gov.uk/ukpga/1996/18/section/27J, read on 2026-09-29
Response to a request: Employment Rights Act 1996 s.27J: the response period is four weeks beginning with the date of the request, legislation.gov.uk — https://www.legislation.gov.uk/ukpga/1996/18/section/27J, read on 2026-09-29
Requests per worker: Employment Rights Act 1996 s.27J: a worker may not make more than one request in any three-month period, legislation.gov.uk — https://www.legislation.gov.uk/ukpga/1996/18/section/27J, read on 2026-09-29
Independent tronc: Employment Rights Act 1996 s.27F(2), legislation.gov.uk — https://www.legislation.gov.uk/ukpga/1996/18/section/27F, read on 2026-09-29
Employment Rights Act 2025 tipping changes: Employment Rights Act 2025 s.14 "Policy about allocating tips etc: consultation and review" (consult workers or their representatives before the first policy and at every review, review at least every three years): marked prospective, not in force at Royal Assent (s.159(3)), legislation.gov.uk — https://www.legislation.gov.uk/ukpga/2025/36/section/14, read on 2026-09-29
Revised code of practice: gov.uk, "Distributing tips fairly: revised statutory code of practice" (updated 29 July 2026): "previously laid before Parliament, but has been withdrawn so that a new public consultation can be held"; "employers should continue to follow the existing code of practice" — https://www.gov.uk/government/publications/distributing-tips-fairly-revised-statutory-code-of-practice, read on 2026-09-29
Fairness factors: Code of Practice on Fair and Transparent Distribution of Tips, paragraph 23, gov.uk — https://www.gov.uk/government/publications/distributing-tips-fairly-statutory-code-of-practice/code-of-practice-on-fair-and-transparent-distribution-of-tips-html-version, read on 2026-09-29

Frequently asked questions

When did the tipping law come into force?: 1 October 2024. The Employment (Allocation of Tips) Act 2023 inserted the duties into the Employment Rights Act 1996; the statutory Code of Practice on Fair and Transparent Distribution of Tips explains what a fair allocation looks like.
Can an employer keep part of the tips?: No. The whole of the qualifying tips must be allocated fairly between workers, and the Code of Practice says without deductions except in very limited scenarios such as income tax. Tips are allocated between workers, so an owner who is not a worker of the business is not part of the allocation.
Does the law apply to cash tips?: It applies to qualifying tips: those the employer receives, and those workers receive that are subject to employer control. A cash tip handed to a worker and kept by them without employer involvement is outside the allocation duty; cash collected into a pool is inside it.
What can a worker do if tips are withheld?: Complain to an employment tribunal. The Act gives workers the right to bring a claim for a failure to allocate fairly, to pay on time, or to provide the records they asked for.
Is the Employment Rights Act 2025 tipping change in force?: No. Section 14 (consult workers on the policy, review it at least every three years) is marked prospective on legislation.gov.uk, and the revised code of practice laid for it was withdrawn so a new consultation can be held. The existing code still applies.

How to split tips between staff fairly (hours, points, front and back of house)
Four ways to share a tip pool, compared on the same example: by hours, by points, hours x points, and a front/back of house split, with the leftover pennies.
What is a tronc and how does it work? (UK, with 2026/27 NICs table)
A tronc shares tips through a troncmaster, not the employer: PAYE still applies, National Insurance does not. Monthly NICs saved by pay and tips, 2026/27 rates.

Last updated 2026-09-29. General information and calculations based on the Employment (Allocation of Tips) Act 2023, the statutory Code of Practice and HMRC guidance. Not legal or tax advice.