Can a UK restaurant keep any part of a service charge?

No. Under the Employment (Allocation of Tips) Act 2023 employers must pass on 100% of qualifying tips and service charges to workers without deduction, including no deduction for card processing costs.

Do I need a written tipping policy?

Yes, if tips are paid at your business more than occasionally and not exceptionally. The policy must be in writing and available to all workers at the place of business.

How long must UK restaurants keep tipping records?

Three years from the date the tip was paid. A worker can request their own tipping record, and you must respond within four weeks.

Do kitchen staff have to receive tips?

The Act requires fair allocation and the statutory Code of Practice treats back-of-house contribution as relevant. There is no fixed split, but a policy that excludes the kitchen entirely is hard to justify as fair.

What happens if an employer breaches the tipping rules?

A worker can bring a claim in the employment tribunal. Tribunals can order the employer to revise an allocation and can award compensation of up to £5,000 for consequential financial loss.

Guide

UK tipping law for restaurants: what the 2023 Act requires

The Employment (Allocation of Tips) Act 2023 requires UK employers to pass on 100% of qualifying tips to workers without deduction, allocate them fairly, publish a written tipping policy, and keep records for three years. Workers can bring a tribunal claim if you get it wrong.

Last reviewed July 2026

What the Act requires

Pass on 100% of qualifying tips, gratuities and service charges to workers, with no deduction for card processing fees or administration
Allocate them fairly between workers, including eligible agency workers
Pay them no later than the end of the month following the month the tip was received
Have a written tipping policy, available to all workers, where tips are paid more than occasionally
Keep records of tips received and how they were allocated for three years, and provide a worker with their record on request

What counts as a qualifying tip

Employer-received tips — anything paid by card, added as a service charge, or otherwise passing through the business — are squarely in scope. Cash handed directly to a worker and kept by them is generally out of scope, unless the employer exercises control or significant influence over it.

Fair allocation and troncs

Fair does not mean identical. You can weight allocation by role, hours worked, seniority or performance, provided the approach is genuinely fair, consistently applied and explained in your written policy. Back-of-house staff may be included and, given the statutory Code of Practice on fairness, excluding the kitchen entirely is difficult to defend.

Many operators run a tronc — an independent arrangement, usually with a troncmaster, that distributes tips. A properly constituted tronc can have National Insurance advantages, but it does not remove the employer's obligations under the Act. Take payroll advice before setting one up.

What this means for your till setup

1Record tips and service charge as separate lines from food and drink sales, so allocation can be evidenced.
2Attribute tips to the service period and, where your policy needs it, to the staff on shift.
3Keep an exportable record covering three years — the retention period is a legal requirement, not a nicety.
4Make sure no automatic deduction is applied to the tip line anywhere in the chain from terminal to payroll.

Tipping law questions

Can a UK restaurant keep any part of a service charge?: No. Under the Employment (Allocation of Tips) Act 2023 employers must pass on 100% of qualifying tips and service charges to workers without deduction, including no deduction for card processing costs.
Do I need a written tipping policy?: Yes, if tips are paid at your business more than occasionally and not exceptionally. The policy must be in writing and available to all workers at the place of business.
How long must UK restaurants keep tipping records?: Three years from the date the tip was paid. A worker can request their own tipping record, and you must respond within four weeks.
Do kitchen staff have to receive tips?: The Act requires fair allocation and the statutory Code of Practice treats back-of-house contribution as relevant. There is no fixed split, but a policy that excludes the kitchen entirely is hard to justify as fair.
What happens if an employer breaches the tipping rules?: A worker can bring a claim in the employment tribunal. Tribunals can order the employer to revise an allocation and can award compensation of up to £5,000 for consequential financial loss.