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Employment United Kingdom For businesses

Tipping Act Compliance Check

Check whether your business complies with the Employment (Allocation of Tips) Act 2023, which requires fair and transparent tip distribution to workers.

Start free check 10 questions · 6 minutes · No signup
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Did you know? The numbers behind this check.

  • 1 Oct 2024Act in force since
  • Up to £5,000Compensation per worker
  • 3 yearsTipping records must be kept
  • Employees & agency workersWorkers who can claim

Why this matters.

The Employment (Allocation of Tips) Act 2023 came into force on 1 October 2024 and fundamentally changes how tips, gratuities, and service charges must be handled in the UK. Employers are now legally required to pass 100% of tips to workers — retaining any portion, even to cover admin costs, is unlawful. All businesses that receive tips must have a written tipping policy and keep records of tip allocation for at least three years.

Workers have the right to request a copy of their employer’s tipping records and can bring claims to an employment tribunal if tips are withheld or unfairly distributed. The hospitality sector is most affected, but the Act applies to any business where customers leave tips — including beauty salons, taxi operators, and delivery services. Penalties include an order to pay the withheld tips to workers plus compensation of up to £5,000 per affected worker.

Have these to hand.

  • Details of how tips and service charges are currently collected at your business
  • Your current policy or practice for distributing tips to staff
  • Whether you use a tronc scheme or third-party tip management system
  • Records of any tips retained or deducted for admin/credit card fees

What you’ll get.

  • 1A score out of 100Where you stand today, at a glance.
  • 2Findings ranked by riskWhat could cost you, highest risk first.
  • 3A plan with timeframesWhat to fix first and by when.

Use this free tool to check whether your tip distribution practices, written policy, and record-keeping meet the requirements of the Employment (Allocation of Tips) Act 2023. Get a clear action plan in minutes.

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General guidance only, not legal advice. Consult a qualified solicitor or adviser in your jurisdiction for specific issues.