If you get tips at work they do not count towards the National Minimum Wage. You still have to pay Income Tax on tips and may have to pay National Insurance.
How tips are paid
You could get tips:
- directly from a customer in cash or electronically, for example through a mobile app
- as part of your pay packet from your employer
- through a separate system for managing and sharing out tips at your workplace (known as a ‘tronc’)
How your employer handles tips
The government has a Code of Best Practice on tips that says how your employer should handle them.
Your employer does not have to follow it, but if they do they should have a policy on tips that includes information on:
- how tips are distributed or shared
- the name of the person responsible for managing tips (if there is one)
- if tips paid directly to staff members by customers are treated differently
- any deductions taken from tips
- what happens during leave, for example holidays, sick leave, parental leave
Where to get help
Contact Acas if you have a question about tips or the National Minimum Wage.