Know your rights: Working under the new ‘Tipping Act’
From 1 October 2024, employers must pass on all tips to their workers, in line with a new law known as the ‘Tipping Act’. Tips include money given to employees by customers, as well as service charges that are added to the bill.
The new law applies if an employer collects tips and shares them out, for example in a pub, bar, café, restaurant, hairdressers, beauty salon or casino. If a customer directly gives you a tip in cash or through a tipping app it isn’t covered by this new law. It’s your responsibility to pay tax on tips you get directly from customers.
An employer doesn’t have to share tips equally between workers. They have to make sure the process is fair, clear and reasonable. For example, they might decide to give a bigger share of tips to staff who have worked at the company for longer. An employer can also consider the customer’s intention, for example, if the customer wanted to tip a particular worker, they might choose to give all of the tip to that employee.
You should get your tips by the end of the month after they were given. An employer may have to take some money from your tips to pay for any tax or National Insurance. They can’t take anything else from your tips, for example admin charges when tips are made using card payments. To find out more please go to: www.citizensadvice.org.uk/work/pay/check-what-tips-and-service-charges-youre-entitled-to/
If you are an employer, you can get advice from the Advisory, Conciliation and Arbitration Service (ACAS), an independent organisation that gives employees and employers advice about people’s rights at work, please go to: www.acas.org.uk/contact
If you would like to speak to an adviser, please call the Citizens Advice Basingstoke free Adviceline on 0808 278 7829, Mon-Fri, 9am-5pm. Citizens Advice Basingstoke is an independent charity, helping local people to resolve their problems. We are here to help.
National Citizens advice website www.citizensadvice.org.uk
Registered charity no 900116.
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