If you run a restaurant, hotel, or any hospitality business, you know how important tips and service charges are for your staff. But are they being shared fairly and following the rules?
Many businesses find this tricky, which can make staff unhappy or cause legal problems. That’s where tronc schemes and troncmaster services can help. A tronc scheme collects all tips and service charges and shares them fairly among your team.
A troncmaster looks after the process to make sure everything is clear and follows the law. With a good system, your staff get their fair share, and managing tips becomes much easier for you.
What exactly is a tronc scheme?
A tronc is a system to manage tips fairly, instead of letting staff divide tips themselves. A tronc pools all the money and shares it based on clear rules.
The word “tronc” basically comes from the French phrase tronc des pauvres, which means “poor box.” A long time ago, churches used a tronc to collect donations for the needy. In hospitality, the idea is similar as you are collecting money (tips) and making sure it’s shared fairly among your team.
Tronc schemes are separate from payroll and are usually run by a troncmaster. They can also help you save on National Insurance contributions when done correctly.
Who is a troncmaster and why do you need one?
A troncmaster is the person in charge of the tronc. They make sure tips are collected and shared properly.
Here’s what a troncmaster does for you:
- Decides how tips are shared: The troncmaster works out a fair way to split tips and service charges among the employees. This can depend on hours worked, job role, or experience. The goal is to make sure everyone gets a fair share of their work.
- Follows the law: The troncmaster makes sure the tronc scheme follows all tax rules and the Employment (Allocation of Tips) Act 2023. This law says staff must get all their tips with no deductions.
- Keeps it clear: The troncmaster shows staff how tips are shared. This helps your team understand the process, trust it, and feel confident about getting their fair share.
You can have a troncmaster from your own staff, or you can hire an external service. Outsourcing is often easier because these specialists know the ins and outs of tronc schemes and can take the administrative burden off your shoulders.
Why does a tronc scheme benefit you and your team?
If you want tips to be shared fairly and your team to feel valued, a tronc scheme is the way to go. It’s not just about following the rules; it actually makes life easier for everyone.
For you as the employer:
- Save on taxes: Tips paid through a tronc are usually free from National Insurance. This means you could save a good amount each year.
- Stay on the right side of the law: A good tronc keeps you compliant with tax and employment rules, which means fewer headaches and no worries about fines.
- Keep your staff happy: When tips are shared fairly, your team feels appreciated. Happy staff give better service, which your customers will notice.
- Less admin work: With a clear system, managing tips is simple and takes less of your time.
For your employees:
- Fair pay for everyone: Tips are divided based on clear rules like hours worked or job role, so nobody feels left out.
- More money in hand: As tronc is tax-efficient, staff can take home more of their tips.
- Trust and clarity: Everyone can see how tips are shared, which makes them feel confident and treated fairly.
A tronc scheme is really a win-win as you, your staff, and even your customers all get good benefits.
How to set up a tronc scheme?
If you want to set up a tronc scheme, here’s a step-by-step guide:
- Decide who gets tips: Usually, all staff who help customers should be included. This means both front-of-house and kitchen staff.
- Set the rules: Decide how tips will be shared. Will it be based on hours worked, job role, or experience? Also, ensure the rules are easy to understand and fair for everyone.
- Choose a troncmaster: Decide if you’ll handle it internally or hire an external service. Either way, this person will manage the scheme.
- Communicate with your team: Let your employees know how the scheme works and how they can check their tip allocation.
- Review regularly: Make sure the scheme stays fair, transparent, and compliant with the latest laws.
Legal considerations you can’t ignore
The Employment (Allocation of Tips) Act 2023 changed how tips and service charges must be handled in the UK. Here’s what you need to know:
- All tips go to employees: You can’t deduct admin fees or other charges. 100% of tips and service charges must reach your staff.
- Fair and transparent: Tips must be distributed fairly, and the rules must be clear.
- Keep records: You need to document how tips are collected and distributed.
Not following these rules could lead to legal problems, including claims for unlawful deduction of wages. So setting up a proper tronc scheme isn’t optional—it’s essential.
Should you use a troncmaster service?
Many businesses find it easier to use a professional troncmaster service. Here’s why:
- Expert knowledge: They understand the rules, so you don’t have to worry about breaking the law.
- Clear reports: They show exactly how tips are shared, so staff always know the process.
- Less work for you: Outsourcing reduces your admin tasks.
- Flexible options: Some services run the whole scheme, while others just give advice if you want more control.
When picking a service, check their experience, how well they communicate, if they follow the law, and their costs. The right provider can save you stress and keep your team happy.
Conclusion
If you want tips to be shared fairly and legally, a tronc scheme is a great choice. With a good troncmaster, either from your team or an outside service, you can make sure tips are divided fairly, keep staff happy, and even save on taxes.
Your team works hard to give great service, and a tronc scheme helps them get the reward they deserve. If you haven’t set one up yet, now is the right time. A well-run tronc scheme keeps everyone satisfied—your staff, your customers, and you.
For more help setting up a fair and simple tronc scheme, contact us today.
