Tipping: Code of Best Practice

We make a discretionary service charge of [xx]% to customer bills for service. Customers are free to amend or remove the service charge when their bills are settled.

Service charges together with any non-cash tips or gratuities added by customers are distributed to workers through a tronc. The business will retain [xx] %[this covers overheads / administration of the tronc / card handling charges].

[Name]is the tronc master responsible for the administration of the collection and distribution of service charges, tips, and gratuities paid through the tronc.

By using this system, service charges and any other pooled tips and gratuities, are able to be distributed to you without any value added tax (VAT) having first to be deducted. Payments are then made to you with any income tax due having been deducted - but without any national insurance contributions (NICs) having to be deducted.

You pay NICs to build up your entitlement to certain social security benefits, including the state pension.The type and level of NICs you pay depends on how much you earn and whether you are employed or self-employed. You stop paying NICs in the year you reach state pension age. You should be aware that if you do not make minimum payments for NICs this may impact upon your entitlement to these benefits. You can find out more about national insurance by visiting the Directgov website (www.direct.gov.uk).

If you receive cash directly from customers or cash tips have been left on the table these belong to you and it is up to you to decided with other members of staff if you retain or pool them. Cash tips are counted as earnings for income tax purposes and it is your responsibility to make proper disclosure to HM Revenue & Customs (HMRC) in respect of these earnings.

During periods of leave (including annual leave, sick and all other forms of paid leave) you will be paid your basic wage.

[For businesses with a tronc: The tronc master will inform you about the arrangements for the distribution of service charges, tips and gratuities during periods of leave.]

[For businesses without a tronc: The arrangements for the distribution of service charges, tips and gratuities during periods of leave are (business to insert).]

Our basic pay rates will always be at least the national minimum wage level. The current national minimum wage rates can be found by visiting www.direct.gov.uk