What is a tronc and how does it work? (UK, with 2026/27 NICs table)
A tronc is a pay arrangement for sharing tips, gratuities and service charges, run by a troncmaster: a person other than the employer who decides who gets what. Income tax is still taken through a PAYE scheme in the troncmaster's name, but when the employer neither pays out nor allocates the tips, no Class 1 National Insurance is due on them. For a worker already above the thresholds that is 23% of the tips (8% employee, 15% employer, 2026 to 2027): £69.00 a month on £300.00 of tips.
How a tronc works
- Customers tip by card, cash or service charge; the money is collected for the team.
- The troncmaster, not the business, decides the allocation, following the written tipping policy.
- The troncmaster runs a PAYE scheme for the tips in their own name and deducts income tax.
- Workers are paid no later than the end of the month after the customer paid.
HMRC lets the tips out of National Insurance when two conditions are both met: the tips are not paid to the worker by the employer, directly or indirectly, and do not represent money previously paid to the employer; and they are not allocated, directly or indirectly, by the employer. If the business decides the split, NICs are due, whatever the scheme is called. Under the tipping law the employer is treated as allocating fairly when it arranges for an independent tronc operator to do it and it is fair to do so (s.27F).
National Insurance saved per month (2026 to 2027)
One worker, category A, monthly pay. Employee NICs 8% from £1,048.00 to £4,189.00, employer NICs 15% above £417.00. Below the primary threshold only the employer saving remains.
| Pay before tips | Tips | Employee NICs saved | Employer NICs saved | Total |
|---|---|---|---|---|
| £900.00 | £100.00 | £0.00 | £15.00 | £15.00 |
| £900.00 | £200.00 | £4.16 | £30.00 | £34.16 |
| £900.00 | £300.00 | £12.16 | £45.00 | £57.16 |
| £900.00 | £400.00 | £20.16 | £60.00 | £80.16 |
| £900.00 | £600.00 | £36.16 | £90.00 | £126.16 |
| £1,600.00 | £100.00 | £8.00 | £15.00 | £23.00 |
| £1,600.00 | £200.00 | £16.00 | £30.00 | £46.00 |
| £1,600.00 | £300.00 | £24.00 | £45.00 | £69.00 |
| £1,600.00 | £400.00 | £32.00 | £60.00 | £92.00 |
| £1,600.00 | £600.00 | £48.00 | £90.00 | £138.00 |
| £2,400.00 | £100.00 | £8.00 | £15.00 | £23.00 |
| £2,400.00 | £200.00 | £16.00 | £30.00 | £46.00 |
| £2,400.00 | £300.00 | £24.00 | £45.00 | £69.00 |
| £2,400.00 | £400.00 | £32.00 | £60.00 | £92.00 |
| £2,400.00 | £600.00 | £48.00 | £90.00 | £138.00 |
Run your own staff in the tronc calculator: it takes the names and shares from the tip split calculator, handles under-21s, and shows weekly, monthly or yearly figures. The Employment Allowance, if the business claims it, is not in these figures.
Sources
- 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
- No NICs on tips when: HMRC guide E24, Tips, gratuities, service charges and troncs (updated 18 July 2025), gov.uk — https://www.gov.uk/government/publications/e24-tips-gratuities-service-charges-and-troncs/guidance-on-tips-gratuities-service-charges-and-troncs, read on 2026-09-29
- PAYE on a tronc: HMRC guide E24, gov.uk — https://www.gov.uk/government/publications/e24-tips-gratuities-service-charges-and-troncs/guidance-on-tips-gratuities-service-charges-and-troncs, read on 2026-09-29
- Tips and the minimum wage: HMRC guide E24, gov.uk — https://www.gov.uk/government/publications/e24-tips-gratuities-service-charges-and-troncs/guidance-on-tips-gratuities-service-charges-and-troncs, read on 2026-09-29
- Weekly thresholds: HMRC, Rates and thresholds for employers 2026 to 2027 (page updated 1 September 2026), gov.uk — https://www.gov.uk/guidance/rates-and-thresholds-for-employers-2026-to-2027: weekly PT £242, ST £96, UEL £967, UST £967, read on 2026-09-29
- Monthly thresholds: HMRC, Rates and thresholds for employers 2026 to 2027 (page updated 1 September 2026), gov.uk — https://www.gov.uk/guidance/rates-and-thresholds-for-employers-2026-to-2027: monthly PT £1,048, ST £417, UEL £4,189, UST £4,189, read on 2026-09-29
- Annual thresholds: HMRC, Rates and thresholds for employers 2026 to 2027 (page updated 1 September 2026), gov.uk — https://www.gov.uk/guidance/rates-and-thresholds-for-employers-2026-to-2027: annual PT £12,570, ST £5,000, UEL £50,270, UST £50,270, read on 2026-09-29
- Employee rate: HMRC, Rates and thresholds for employers 2026 to 2027 (page updated 1 September 2026), gov.uk — https://www.gov.uk/guidance/rates-and-thresholds-for-employers-2026-to-2027: category A employee rate 8% between the primary threshold and the upper earnings limit, read on 2026-09-29
- Employee rate above the UEL: HMRC, Rates and thresholds for employers 2026 to 2027 (page updated 1 September 2026), gov.uk — https://www.gov.uk/guidance/rates-and-thresholds-for-employers-2026-to-2027: category A employee rate 2% above the upper earnings limit, read on 2026-09-29
- Employer rate: HMRC, Rates and thresholds for employers 2026 to 2027 (page updated 1 September 2026), gov.uk — https://www.gov.uk/guidance/rates-and-thresholds-for-employers-2026-to-2027: category A employer rate 15% above the secondary threshold, read on 2026-09-29
- Employment Allowance: HMRC, Rates and thresholds for employers 2026 to 2027 (page updated 1 September 2026), gov.uk — https://www.gov.uk/guidance/rates-and-thresholds-for-employers-2026-to-2027: Employment Allowance for 2026 to 2027 is £10,500, read on 2026-09-29
Frequently asked questions
- Who can be a troncmaster?
- HMRC defines the troncmaster as the person, other than the employer, responsible for arrangements to share tips among employees. The Code of Practice says the employer can appoint a member of staff to allocate and distribute tips, who can act as an independent tronc operator.
- Do you pay tax on tronc payments?
- Yes, income tax through PAYE: the troncmaster runs a PAYE scheme for the tips in their own name and is personally responsible for it. National Insurance is what a genuine tronc removes.
- Do tips count towards the minimum wage?
- No. HMRC guide E24: amounts paid by the employer that represent tips, gratuities, service charges or cover charges do not count towards National Minimum Wage pay.
- Do I have to declare tips in the UK?
- Tips paid through payroll or a tronc are taxed through PAYE. Tips a customer gives a worker directly, kept without any involvement from the employer, are outside PAYE and National Insurance but still taxable: HMRC guide E24 says the worker must tell HMRC, for example in a Self Assessment tax return.
More guides
- Tipping law UK: what employers must do (2026)
The Employment (Allocation of Tips) Act 2023 in one table: fair allocation, no deductions, pay by the end of the next month, written policy, 3-year records.
- 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.
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.