NIM02941 - Tips, gratuities and service charges: Tronc arrangements: About troncs
Definition of a tronc
A tronc is a special pay arrangement used to distribute tips, gratuities and service charges. Commonly a tronc is a central pool of funds in which some or all of the tips and service charges paid by customers are distributed to employees. How such arrangements work is entirely a matter for the business. How amounts paid from the tronc are distributed is a matter for the troncmaster, tronc committee (if one exists) and or tronc members.
Tronc funds
The source of the funds within the tronc is important when considering whether the payments made from the tronc are gratuities or payments in respect of gratuities. For example, if the source of the funds are compulsory service charges (NIM02915)the payments made from the tronc are not gratuities or payments in respect of gratuities and therefore, cannot be disregarded from earnings. Employers may choose to pass on all tips, gratuities and service charges to the tronc. See NIM02943 where an employer withholds payments from a tronc.
Points system
Some troncs use a points system to determine how much should be paid to individual employees.
Example
An employer employs 5 waiters, 1 head waiter and 6 kitchen staff. The employer passes on all gratuities paid by customers to the troncmaster. Only the waiters and head waiter are entitled to a share of the gratuities. Each waiter is entitled to 1 point and the head waiter is entitled to 3 points.
| Description | Amount of payment/points |
|---|---|
| Number of available points | 8 |
| Total amount for distribution | £800 |
| Amount for distribution per point | £100 (£800/8) |
| Head waiter - gross amount | £300 (3 points x £100) |
| Waiters - gross amount | £500 (1 point each =£100) |
Tronc rules
Usually the troncmaster will distribute the tronc funds in accordance with a set of tronc rules. An employee’s share may depend upon a number of factors such as seniority, their position, number of hours worked, sick absence levels, etc.
Tronc members
Tronc members are usually the beneficiaries, i.e. the employees who will receive distributions from the tronc.
Tronc committee
Some or all of the Tronc members may form a committee. The composition of the tronc committee is a matter for those involved. It is not unusual for such committees to be made up of employer representatives, the troncmaster and or tronc beneficiaries and agents such as accountants. The committee will probably be responsible for making decisions and overseeing arrangements. Their duties might include
- amending tronc rules
- appointing troncmasters
- appointing members to the tronc.