Tips at work: your rights, and the new tipping code consultation that closes on 29 September

Updated 26 September 2026

Tipping law is one of the few parts of employment law aimed squarely at hospitality, and it is about to get a second layer. The rules on passing tips on in full are already in force. What changes next is who gets a say in how tips are divided, and the government is asking for views on the wording right now.

What does the law say about tips right now?

The Employment (Allocation of Tips) Act 2023 came fully into force on 1 October 2024. It added a set of sections, numbered 27A to 27X, to the Employment Rights Act 1996. The government's consultation document of 19 August 2026 summarises what they require:

• Pass on everything. Qualifying tips must be passed on in full to workers. No deductions are allowed except those required by law, such as tax.
• Share them fairly. Tips must be allocated fairly between the workers at the place of business, and the employer must have regard to the statutory code of practice when deciding how (section 27D).
• Pay them on time. By the end of the month after the month the customer paid (section 27G).
• Have a written policy. Where tips are paid more than occasionally, the employer must keep a written tipping policy and make it available to workers.
• Keep records, and show them to you. The employer must record all tips received and what each worker was given, and you have a right to see your part of that record.

The rules cover tips, gratuities and service charges alike. The draft revised code is blunt about labels: whether something counts depends on "its substance rather than the terminology used", so renaming a service charge does not take it outside the law. An employer can still add a genuine charge that serves a different purpose, but not one that is really a service charge in disguise.

One thing the tipping law does not do is let tips make up your wages. Gov.uk's tips at work page says tips do not count towards the National Minimum Wage. Your employer must pay at least the minimum wage rate for your age from its own money, and tips come on top.

Which tips does the law cover?

This is where most arguments start. The law covers "qualifying" tips, and the test is control, not payment method. The draft revised code sets it out in paragraphs 13 to 17:

• Card and QR code tips usually land in the employer's account first. That makes them employer-received tips, and the employer is responsible for sharing them fairly.
• Cash you keep yourself, with no employer involvement, is outside the rules.
• Cash the employer gets involved with is inside them. If your manager tells staff how to split cash tips, or collects the cash and pays it out at the end of a shift or through payroll, the employer is likely to have control or significant influence, and the rules apply.
• App tips paid straight to a worker, bypassing the employer altogether, can count as worker-received and fall outside the employer's duties.
• Non-monetary tips with a fixed value, such as vouchers, tokens or a casino chip, can qualify if the employer receives or controls them.

Who is entitled to a share?

The rules apply to all workers, not only employees. That includes agency workers, temporary staff, part-time staff and people on zero-hours contracts, and paragraph 20 of the draft code says fairness must be applied across any mix of them in the same workplace. The self-employed are not covered. If you are unsure which side of that line you fall on, our page on worker and employee status explains the tests.

For agency workers, the "employer" for tipping purposes is the hirer: the restaurant, bar or hotel you are placed in, even if your contract is with an agency or umbrella company. Once the hirer pays your tips to the agency, the agency must pass them on without unauthorised deductions.

Paragraph 27 of the draft code tightens the wording on who should be in the pool. It says the share should broadly go to workers who, as part of their job, personally deal with customers or who physically prepare, handle or serve the food, drink or experience the customer receives, regardless of job title. That is written to include kitchen staff and others behind the scenes who make the service happen.

A workplace that gets tips only now and then, such as a clothing shop tipped a handful of times a year, does not need a written policy. It still has to pass those tips on to the workers who earned them.

What makes a split "fair"?

Fair does not have to mean equal. The draft code accepts that different workers can get different shares for legitimate reasons, and paragraph 30 gives an illustrative list of factors an employer might use:

• the type of role, including the front-of-house and back-of-house split;
• basic pay;
• hours worked while the tips were received;
• individual or team performance;
• seniority or level of responsibility;
• length of service;
• what the customer intended.

Two additions in the August 2026 draft matter for workers:

Fixed or guaranteed sums are discouraged. Paragraph 29 tells employers to be cautious about promising a fixed, minimum or guaranteed amount of tips to a named person or a job category before the pot is shared. Those schemes push the ups and downs onto everyone else, and the draft says they "may be deemed unfair".

The whole scheme is judged, not one shift. Paragraph 31 says fairness should be assessed across the scheme as a whole, including how a bigger share for one group affects everyone else's. A single good or bad night is not proof either way.

The code also warns employers against discrimination. Paragraph 32 flags indirect discrimination as a particular risk, for example where a group that gets fewer tips is disproportionately made up of people sharing a protected characteristic. That is also a separate claim under the Equality Act 2010, with its own rules.

What would the new consultation rules add?

Section 14 of the Employment Rights Act 2025 amends section 27I of the 1996 Act. It is not in force yet. When it starts, employers will have to:

1. Consult before writing the first policy. Through a recognised trade union where there is one, otherwise other worker representatives, and where there are none, directly with the workers likely to be affected.
2. Review the policy at least once every three years, consulting in the same way at each review.
3. Publish an anonymised summary of the views workers gave, available to everyone at that place of business.

The draft code, in paragraphs 33 to 39, fills in what good consultation looks like. It should be genuine and in good faith, with enough time, "rather than a paper exercise". It is advisory, so the employer does not have to do everything workers suggest, but it must still meet the fairness rules. It should not rely only on the largest group or the loudest voices, and a simple majority vote should not be the default, because it can tilt the pot towards whoever outnumbers the rest. Employers should take reasonable steps to hear from people less likely to speak up, including where language, disability, literacy or the nature of their role gets in the way.

Paragraph 42 adds a point worth remembering if you are ever asked to sign up to a new split: staff support for a method only helps the employer if it is genuine and "not coerced by managers or employers".

The consultation: dates and how to respond

The Department for Business, Innovation, Science and Trade issued the consultation on the revised tipping code on 19 August 2026. It follows an earlier consultation that ran from 5 February to 1 April 2026, whose response was published on 29 June 2026.

• Closes: 11:59pm on Tuesday 29 September 2026.
• Online: through the survey linked from the gov.uk consultation page, which the department says it prefers.
• By email: tipping@businessandtrade.gov.uk.
• By post: Wage Policy Team, Employment Rights Directorate, Department for Business, Innovation, Science and Trade, 2nd Floor, Old Admiralty Building, Admiralty Place, London SW1A 2DY.
• Where it applies: England, Wales and Scotland. Tipping is devolved in Northern Ireland, so it does not apply there.

Workers are one of the named audiences, alongside employers, unions and members of the public. There are six questions on the draft code: your overall views, whether it is clear enough, the biggest challenges in adapting to it, remaining concerns, what could be clearer, and any other comments. If you write in rather than use the survey, the department asks you to say which question or paragraph each comment is about, and whether you are replying as an individual or for an organisation.

A worker's response is most useful when it is concrete. If a fixed tip share for one role has cost you money, or you were never shown the policy, or the split was decided by a vote that left your group out, those are exactly the points paragraphs 29, 36 and 38 deal with.

When will the new rules start?

Not yet, and the date has slipped once. An earlier draft of the revised code was published in June 2026 and then withdrawn so that this new consultation could take place. The consultation document says the government will publish its response and a final draft code "later in 2026", to be laid before Parliament. It expects section 14 and the updated code to take effect "in late 2026", subject to Parliament approving the code, and says it will confirm the exact arrangements in due course.

The government's implementation timeline, last updated on 25 September 2026, lists "strengthening tipping law" among the measures that will take effect by the end of 2026. Until then, the existing code from October 2024 applies, and everything in the first four sections of this page is already the law.

How to check your tips are being paid properly

You have a statutory right to see the tipping record. Paragraphs 60 to 64 of the draft code restate how it works:

1. Ask for the written tipping policy. If tips are paid at your workplace more than occasionally, your employer must have one and make it available to you. Read how tips are collected, who is in the pool, and which factors decide the shares.
2. Make a written request for the tipping record. You can make one request every three months, covering up to three years back, for periods you worked there. The employer has four weeks from receiving it to respond.
3. Check what you get back. It must show the total qualifying tips received at your workplace for the period and the amount allocated to you. You will not see what individual colleagues received.
4. Compare against your own notes. Keep a simple log of shifts, busy nights and payslip tip lines. A pattern over time is stronger evidence than one bad week.

Employers sometimes refuse details by pointing to data protection. The draft code's paragraph 64 says data protection "should not be unduly relied upon" to withhold tipping information, because a fair policy can be explained without revealing anyone's personal data.

If your employer is keeping tips or sharing them unfairly

Start inside the business. Raise it informally, then in writing if that fails; our guide to raising a workplace grievance sets out how. The draft code says the Acas Code of Practice on disciplinary and grievance procedures should be followed by both sides, and Acas can help with mediation at any stage.

If that does not work, the claim goes to an employment tribunal. The Fair Work Agency cannot take this one for you: tipping is not among the laws listed in Schedule 7 to the 2025 Act, so there is no state enforcement route for tips as there is for the minimum wage. Our page on reporting your employer to the Fair Work Agency explains what it does cover.

The deadlines depend on what went wrong:

The 12-month limit comes from section 27K, which also lets the Acas early conciliation extension apply. The shorter policy and records limit in section 27N is one of the many time limits that move from three months to six under Schedule 12 to the 2025 Act, commenced from 1 October 2026 by SI 2026/954, but only for failures on or after that date. In both cases a tribunal can allow a late claim only if it was not reasonably practicable to bring it in time, which is a hard test to pass. Start Acas early conciliation well before the deadline, and use our tribunal deadline calculator to check your dates.

If the tribunal finds the complaint well founded, the draft code's paragraph 69 lists what it can do: make a declaration, order the employer to revise a past allocation, make a recommendation, or order compensation. Compensation can extend to other workers at the same place of business who did not bring a claim. Under section 27M, the award for financial loss is capped at £5,366, the figure since 6 April 2026.

If tips were deducted from your pay after they were allocated to you, that can also be an unlawful deduction from wages, which has its own limit. See our page on the unpaid wages claim deadline.

Tax on tips

Tips are taxable. Gov.uk says you still have to pay Income Tax on tips and may have to pay National Insurance. Whether National Insurance is due depends on how the tips reach you, including whether they go through a tronc, a pooled fund run by someone independent of the employer. HMRC sets out the detail for employers in its guidance on tips, gratuities, service charges and troncs (E24), so if a payslip deduction on your tips looks wrong, that is the document your payroll team should be working from.

In short, HMRC says National Insurance is always due on a mandatory service charge paid out to employees, and in most cases where the employer passes tips on itself. It is not due on tips paid out of a tronc where the employer plays no part, directly or indirectly, in deciding who gets what.

A tronc does not let the employer off the hook. Paragraph 47 of the draft code says that if the employer becomes aware the tronc operator is acting unfairly, it must act, by changing the instructions, replacing the operator or ending the tronc. If it does nothing, it can face a tribunal claim.

This page is general information for England, Wales and Scotland, not legal advice. For your own situation, speak to Acas, a solicitor, or your union.