Reviews
Payroll software for hospitality UK: tips, troncs and variable hours
Compare UK payroll software for pubs, hotels and restaurants: tronc rules, tip allocation under the 2023 Act, variable hours and holiday accrual.
What to take away
- Tronc pay sits outside National Minimum Wage and, with an independent troncmaster, outside employer National Insurance.
- Payroll software for hospitality must handle pooled tips, variable hours and holiday accrual without a spreadsheet in the middle.
- The Employment (Allocation of Tips) Act 2023 requires fair distribution, a written policy and three years of records.
- Absence, shift swaps and agency cover all feed into pay, so they belong in one system.
Why hospitality pay is harder than it looks
A pub, hotel or restaurant pays people through several channels. There is basic hourly pay, a tronc or pooled tips pot, and often a discretionary service charge. Getting them mixed up changes what counts as wages.
Hours add a second layer. A kitchen porter might work 18 hours one week and 42 the next, with split shifts and a share of the pooled pot on top. Payroll built for fixed monthly salaries struggles with that.
How a tronc actually works
A tronc is a separate arrangement for holding and sharing tips. The troncmaster runs it, and HMRC expects that role to be independent of the employer. That independence keeps employer National Insurance off the pool.
Allocation follows a written method, often points per shift or hours worked, and it should be applied consistently. Staff can ask how their share was worked out.
Because a tronc holds named pay data, the ICO guide to GDPR applies to those records too. Tax and employee National Insurance are still deducted through PAYE, and the tronc is reported separately on the Full Payment Submission.
What the Employment (Allocation of Tips) Act changed
The Employment (Allocation of Tips) Act 2023 came into force on 1 October 2024 across England, Scotland and Wales. Employers must allocate tips and service charges fairly and publish a written policy.
Records of how tips were shared must be kept for three years, and workers can raise a tribunal claim if the split looks unfair.
The statutory Code of Practice sets out what fair means, including for agency workers. Agency staff who have worked for the employer for 12 continuous weeks share in tips on the same footing as direct employees.
Temporary cover often arrives through an agency, and those timesheets follow different rules. Our guide to payroll software for recruitment agencies covers agency timesheets and umbrella payroll.
Hourly staff also have a right to an itemised payslip under the Employment Rights Act 1996.
Matching payroll software to shift patterns
| Feature to check | Why it matters | Question for the supplier |
|---|---|---|
| Separate tip and tronc pay elements | Keeps pooled money out of minimum wage and employer NIC calculations | Can tronc be reported on the FPS separately? |
| Hourly holiday accrual | Zero hours contracts need accrual each pay period | How is holiday calculated for irregular hours? |
| Rota to timesheet integration | Shift swaps change pay before the rota settles | Do approved swaps flow into the pay run? |
| Pension assessment each period | Variable earnings cross the auto enrolment threshold in some weeks | How are earnings assessed for irregular periods? |
Named UK payroll products to compare include Xero Payroll, QuickBooks Payroll, Sage 50 Payroll, BrightPay and IRIS Payroll. All support hourly pay and pension assessment.
Example: a weekend tronc run
- Card and cash tips are logged per shift at the till.
- The troncmaster exports the pool and the hours worked by everyone in the scheme.
- Points or hours produce a share per person, checked against the written policy.
- The software adds the share as a tronc element and the FPS reports tax and employee NICs.
Variable hours, holiday accrual and pensions
Variable hours staff accrue statutory holiday at 5.6 weeks a year. After Harpur Trust v Brazel, the 12.07% shortcut for part year workers came under scrutiny. Software that accrues by hours worked is usually easier to defend.
Auto enrolment duties come from the Pensions Act 2008, and assessment runs each pay period, so variable earnings can move a worker in and out of the scheme.
Absence, no shows and cover
Late notice absence is normal in hospitality, and cover often comes from another site or an agency. Keeping absence, cover and pay together stops a shift being paid twice.
If area managers work away from the venues, the same holiday and absence tools used by remote teams apply to them. Multi site operators usually want one holiday calendar across every venue.
AI features now appear in rotas and timesheets, mainly for demand forecasting and for flagging odd entries. Any use needs human review, and our piece on payroll software AI applications in England explains where the data changes the risk.
Community pubs, hospitality training charities and staff volunteering schemes bring extra duties. Our guide to HR software for charities covers volunteer records, Gift Aid and Charity Commission reporting.
Common questions
Does tronc pay count towards the National Minimum Wage?
No. Tips, gratuities, service charge and cover charges are excluded from minimum wage calculations.
Who pays employer National Insurance on tips?
Where the troncmaster is genuinely independent, the pool avoids employer National Insurance. Employee tax and National Insurance are still taken through PAYE.
Can payroll software handle holiday pay for zero hours staff?
Most UK products accrue holiday by hours or days worked rather than a fixed salary. Check the method for irregular hours before relying on it.
Do agency workers share in the tronc?
The statutory Code of Practice covers agency workers once they have worked for the employer for 12 continuous weeks.
