Beta This part of GOV.UK is being rebuilt – find out what this means

HMRC internal manual

National Insurance Manual

HM Revenue & Customs
, see all updates

Tips, gratuities and service charges: Tronc arrangements: About troncs

Definition of a tronc

A tronc is a special pay arrangement used to distribute tips, gratuities and servicecharges. Commonly a tronc is a central pool of funds in which some or all of the tips andservice charges paid by customers are distributed to employees. How such arrangements workis entirely a matter for the business. How amounts paid from the tronc are distributed isa matter for the troncmaster, tronc committee (if one exists) and or tronc members.

Tronc funds

The source of the funds within the tronc is important when considering whether thepayments made from the tronc are gratuities or payments in respect of gratuities. Forexample, if the source of the funds are compulsory service charges (NIM02915)the payments made from the tronc are not gratuities or payments in respect of gratuitiesand therefore, cannot be disregarded from earnings. Employers may choose to pass on alltips, gratuities and service charges to the tronc. See NIM02943where an employer withholds payments from a tronc.

Points system

Some troncs use a points system to determine how much should be paid to individualemployees.


Employer employees 5 waiters, 1 head waiter and 6 kitchen staff. The employer passes on all gratuities paid by customers to the troncmaster. Only the waiters and head waiter are entitled to a share of the gratuities. Each waiter is entitled to 1 point and the head waiter is entitled to 3 points.

  No of available points 8
  Total amount for distribution £800
  Amount for distribution per point £100 (£800/8)
  Head waiter – gross amount £300 (3 points x £100)
  Waiters – gross amount £500 (£100 each)

Tronc rules

Usually the troncmaster will distribute the tronc funds in accordance with a set oftronc rules. An employee’s share may depend upon a number of factors such asseniority, their position, number of hours worked, sick absence levels, etc.

Tronc members

Tronc members are usually the beneficiaries, i.e. the employees who will receivedistributions from the tronc.

Tronc committee

Some or all of the Tronc members may form a committee. The composition of the tronccommittee is a matter for those involved. It is not unusual for such committees to be madeup of employer representatives, the troncmaster and or tronc beneficiaries and agents suchas accountants. The committee will probably be responsible for making decisions andoverseeing arrangements. Their duties might include

  • amending tronc rules
  • appointing troncmasters
  • appointing members to the tronc.