Employee gets tips, gratuities or service charges through a tronc

PAYE procedures to follow if your employees get tips at work through a central pool called a tronc.


A tronc is a separate organised pay arrangement sometimes used to distribute tips, gratuities and service charges.

If your employees get payments through a tronc the person who runs the tronc - called a troncmaster - must run a payroll and report the information to HM Revenue and Customs (HMRC).

You must tell HMRC who the troncmaster is so that they can set up a PAYE scheme for the tronc.

What to pay

If you have to pay National Insurance contributions (NICs) - the table below tells you when you do - you’ll need to find out from the troncmaster what’s being paid and when, so that you can add it to your employee’s other pay.

How money is divided What to pay
You decide how the tronc money is divided You pay PAYE tax and NICs
The troncmaster decides how the money is divided Troncmaster pays PAYE tax - no NICs are due
Someone else, who’s not acting for you, decides how the payments are distributed Troncmaster pays PAYE tax - no NICs are due

E24 Tips, Gratuities, Service Charge and Troncs

Published 12 June 2014