Free generator
Tipping policy generator (UK)
Answer the questions and the policy writes itself below: how customers tip, who shares, how, when tips are paid, the tronc, the records and how staff ask for them. Each clause names the section of the law it answers. Copy it into your handbook or print it.
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Tipping policy: [Business name]
[Place of business]. In force from [date].
1. What this policy covers
This policy sets out how [Business name] deals with tips, gratuities and service charges at [Place of business]. It applies from [date] to every worker at [Place of business].
Employment Rights Act 1996 s.27I(1): a written policy for the place of business
2. How customers tip here
We do not require or encourage customers to pay tips or service charges. Customers may still choose to tip.
Customers can leave: card tips (added on the card machine or the bill) and cash tips handed to staff or left on the table.
Employment Rights Act 1996 s.27I(2)(a): whether the employer requires or encourages tips
3. All tips go to workers, without deductions
Every qualifying tip, gratuity and service charge is passed on to workers in full. We do not deduct card processing fees, breakages, till shortages or any other cost from tips.
The only deductions are income tax and, where it is due, National Insurance, made through our payroll.
Employment Rights Act 1996 s.27D(1) and the Code of Practice: pass on all tips without deductions except in very limited scenarios, such as income tax
4. Who shares in tips
Tips are shared between front-of-house staff (waiting, host, runners), kitchen staff (chefs, porters), bar staff and agency workers who work at the place of business at [Place of business].
Directors and owners who are not workers of the business do not share in tips.
Employment Rights Act 1996 s.27D(1): allocated fairly between workers at the place of business; Code of Practice: applies to eligible agency workers
5. How tips are shared
The pool is shared between the workers who share in it in proportion to the hours each of them worked in the period when the tips were received.
In setting this method we took into account these factors from the statutory Code of Practice: hours worked during period when tips are received.
Shares are worked out to the penny. Pennies left over after rounding go one each to the workers with the largest fractions of a penny.
The allocation is made by [Business name], following this policy.
Employment Rights Act 1996 s.27I(2)(b): how tips are allocated between workers; Code of Practice paragraph 23: fairness factors
6. Cash tips
Cash tips are collected and added to the pool, and shared in the same way as card tips.
Employment Rights Act 1996 s.27C: qualifying tips are those the employer receives or controls
7. When tips are paid
Tips are paid monthly through payroll, and always no later than the end of the month after the month in which the customer paid them.
Employment Rights Act 1996 s.27G: paid no later than the end of the following month
8. Records and your right to ask
We keep a record of how every qualifying tip, gratuity and service charge has been dealt with, for 3 years.
You can ask in writing for the records of the tips allocated to you and the total tips at [Place of business], for one month or several consecutive months in the last 3 years in which you worked here. You can make one request every 3 months. We reply within 4 weeks. Send requests to [who to contact: a name, role or email].
Employment Rights Act 1996 s.27J: records kept three years; worker's right to request them
9. Where to find this policy
Every worker at [Place of business] gets a copy of this policy, and it is available from [who to contact: a name, role or email]. Questions about it go to the same contact.
Employment Rights Act 1996 s.27I(3): the policy is made available to all workers
Doing this every month? The Pro tips pack keeps the records.
An Excel workbook with live formulas (shifts to hours to shares to pay), a 3-year record sheet, your policy as a print-ready document and a one-page staff notice.
What a tipping policy must contain
Section 27I of the Employment Rights Act 1996 (inserted by the 2023 Act) asks for a written policy for each place of business where tips are paid more than occasionally. It must say whether the employer requires or encourages customers to tip, and how the employer makes sure all qualifying tips are dealt with under the law, including how they are allocated between workers. It must be available to every worker there.
The generator adds the points the rest of the law makes the policy's business: no deductions (Code of Practice), payment by the end of the following month (s.27G), the independent tronc (s.27F), the record kept for 3 years and the worker's right to ask for it, answered within 4 weeks (s.27J).
The Employment Rights Act 2025 adds a duty to consult workers before the first policy and to review it at least every three years (s.14), but it is not in force yet, and the revised code of practice was withdrawn for a new consultation. The optional review clause is good practice, not a legal requirement today.
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
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.
Frequently asked questions
- Is a tipping policy a legal requirement in the UK?
- Yes, where tips, gratuities or service charges are paid at the place of business on more than an occasional and exceptional basis (Employment Rights Act 1996 s.27I). One policy per place of business, available to all workers there.
- Do I need one policy per site?
- The duty is per place of business, so each site needs its policy. The generator writes one at a time; change the place and the details and print again.
- Do agency workers share in tips?
- The Code of Practice says the rules apply to eligible agency workers, and that fairness applies where permanent staff, agency workers and zero-hours workers work in the same location.
- Is this template legal advice?
- No. It turns your answers into policy text aligned with the Act, the Code of Practice and HMRC guidance, with the source of each clause. Check it against your contracts and take advice if your arrangements are unusual.
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.