The Employment (Allocation of Tips) Act 2024 Explained

What the law says

Since 1 October 2024, all tips, gratuities, and service charges collected by businesses must be passed to workers in full. Employers cannot make any deductions — not for administration, not for credit card processing fees, not for anything. The full amount must reach the workers.

This applies to:

• Cash tips left on the table
• Card tips added at the payment terminal
• Service charges added to bills (including the common 12.5% discretionary charge)
• Tips collected through apps or digital payment systems

Who does it cover?

The law covers all workers in the hospitality sector — not just employees but also agency workers and those on zero-hours contracts. It applies to restaurants, bars, cafés, hotels, and any other hospitality business that collects tips.

How must tips be distributed?

Employers must have a written tipping policy and distribute tips fairly. Fairly doesn't necessarily mean equally — a restaurant might allocate more to servers than kitchen staff, for example — but the policy must be transparent and applied consistently.

Workers have the right to request a written record of how tips have been distributed. Employers must provide this within four weeks of the request.

What happens if employers break the law?

Workers can bring claims to an employment tribunal if their employer fails to pass on tips or doesn't follow a fair distribution policy. Tribunals can order employers to pay any tips that were withheld, plus additional compensation.

What this means for customers

Simply put: when you tip in a UK restaurant today, you can be confident that your tip goes to the staff. The previous opacity around where tips ended up has been replaced with a legal guarantee. Tipping is now a more direct and meaningful gesture than it has ever been in the UK.