Guidance
Employee gets tips, gratuities or service charges through a tronc
PAYE procedures to follow if your employees get tips at work through a central pool called a tronc.
Overview
A tronc is a separate organised pay arrangement sometimes used to distribute tips, gratuities and service charges.
If your employees get payments through a tronc the person who runs the tronc - called a troncmaster - must run a payroll and report the information to HM Revenue and Customs (HMRC).
You must tell HMRC who the troncmaster is so that they can set up a PAYE scheme for the tronc.
What to pay
If you have to pay National Insurance contributions (NICs) - the table below tells you when you do - you’ll need to find out from the troncmaster what’s being paid and when, so that you can add it to your employee’s other pay.
| How money is divided | What to pay |
|---|---|
| You decide how the tronc money is divided | You pay PAYE tax and NICs |
| The troncmaster decides how the money is divided | Troncmaster pays PAYE tax - no NICs are due |
| Someone else, who’s not acting for you, decides how the payments are distributed | Troncmaster pays PAYE tax - no NICs are due |
Updates to this page
Published 12 June 2014