When the Employment (Allocation of Tips) Act 2023 came into force in October 2024, most of the conversation in our sector - quite reasonably - was about people, policy and pay packets. Operators sat down with their HR leads and accountants, drafted a written tipping policy, reviewed their tronc arrangements, and made sure front-of-house and back-of-house felt the change was fair. What got far less attention was the IT side. And eighteen months on, that is where I am still seeing operators caught short.

The Act requires employers to pass on 100% of qualifying tips to workers, fairly, and to keep records that prove they have done so. A statutory code of practice sits alongside it. None of that is new information for anyone running a restaurant in 2026. What is less obvious is that almost every one of those obligations lands, in practice, on a piece of technology somewhere in your estate - your card terminal, your EPOS, your payroll integration, your tronc platform, the network connecting them. If any link in that chain is sloppy, your written policy is a piece of paper without evidence behind it.

I am not going to give tax or legal advice in this article, and you should not take any. Speak to your accountant about the treatment of tronc and National Insurance, and to a specialist payroll provider about the mechanics. What I can talk about is the IT - because that is where hospitality IT specialists like us spend our time, and it is where the practical risk now lives.

How tips actually move through a modern restaurant

Picture a typical Friday service in a London site. A table of six finishes dinner. The server brings the bill on a handheld terminal. The guest taps to pay, adds a 12.5% optional service charge that was suggested on the bill, and on top of that adds a £20 cash tip on the way out. Somewhere in the kitchen, a delivery driver drops off a courier order with a tip added in-app from a third-party platform.

That single table generates four distinct streams of money that all need to land somewhere correct, fair and auditable:

  • The card payment itself, which the acquirer settles into your bank account a day or two later.
  • The optional service charge, which under your tipping policy belongs to staff and must be distributed in a defined way.
  • The cash tip, which never touches your card terminal but still needs to be recorded.
  • The third-party tip from the delivery platform, which arrives via a completely different settlement file.

Each of those flows touches different systems. The card terminal captures the first two. The EPOS records the service charge against the table and the staff member. The cash tip is logged manually - usually into the EPOS or a tronc app at end of shift. The delivery platform tip arrives in a remittance report that has to be reconciled into the same overall pot. The tronc scheme then takes the qualifying tips, applies the agreed allocation rules, and pushes the result to payroll. Payroll runs it through PAYE, and where the tronc is properly constituted and run independently, employer and employee National Insurance treatment may differ. That last part is firmly your accountant’s territory, not mine.

The point is that there is no single system of record. There are four or five, and they have to agree.

The categories matter, because the systems treat them differently

It is worth being precise about the categories because the IT requirements diverge:

  • Cash tips are the simplest in IT terms and the hardest in operational terms. They are not in your card flows at all. They need a capture mechanism - typically a daily log in the EPOS or tronc app - so they can be recorded against the right shift and the right people.
  • Card tips and service charges flow through the terminal and the EPOS. The terminal needs to be configured to capture them as a distinct line, not buried inside the transaction total. The EPOS needs to attribute them correctly to a service period and, where relevant, to individuals or pools.
  • Tronc distributions are calculations performed on top of the above. Whether you run a points system, an hours-worked system, or a hybrid, the tronc platform needs clean input data and has to produce an auditable output that payroll can consume.
  • Third-party platform tips arrive after the fact, in remittance files, and need importing into the same pool before distribution.

If your terminal lumps service charge into the transaction total and your EPOS does not break it back out, you have a data problem that no amount of policy writing will fix.

Why this is genuinely an IT problem

Five things have to be true for the technology to support what the legislation asks for:

  1. Accurate capture at the point of payment. The terminal and EPOS have to record tips and service charges as discrete, labelled items at the moment of transaction. Retrofitting this from a settlement file later is painful and error-prone.
  2. Secure transmission to payroll and tronc systems. Tip data is employee financial data. It has to move between systems over channels that meet your wider security posture, not via emailed spreadsheets. This is where good cyber security practice and clean integrations earn their keep.
  3. Auditable distribution records. You need to be able to show, for any pay period, what came in, how it was allocated, and what each worker received. That is a database problem, not a paperwork problem.
  4. PCI considerations. Tip data is not cardholder data, but it usually rides on the same terminals and the same network as card data. Anything you do to tip handling has to respect the PCI scope you have already worked hard to define and shrink.
  5. Staff self-service and transparency. Workers under the Act are entitled to understand how tips are being allocated. A portal or payslip line that shows them clearly is no longer optional in spirit, even where the precise mechanism is left to the employer.

The vendor landscape, briefly

I am not endorsing anyone here, but it helps to know the shape of the market. On the EPOS side, the major players in UK hospitality - Zonal, Tevalis, Oracle Micros and others - all now offer tip-handling features of varying maturity. Some operators run those features natively. Others have moved to standalone tronc platforms such as TiPJAR, WagePay or Tronc.Services, which specialise in fair distribution, troncmaster workflows and payroll integration. There are good arguments either way and the right answer depends on the size of the estate, the structure of the tronc, and how clean your existing payroll integration is. A specialist payroll provider, working with your accountant, will steer you on the financial side. Our job is to make the integrations actually work.

What compliance looks like at the system level

The written policy, the code of practice and the workers’ right to information all translate, in IT terms, into three things: a complete record of what was received, a defensible record of how it was allocated, and a tamper-evident audit trail that ties the two together. If your tronc platform can show, three months later, exactly what hit the pool on a given day and how it ended up in each payslip, you are in a strong position. If reconciling that involves reopening spreadsheets from a shared drive, you are not.

Common pitfalls I see in the field

A few patterns recur whenever we audit a restaurant group’s tip handling:

  • Card terminals configured by the acquirer at install time, never reviewed since, and quietly bundling service charge into the transaction total.
  • EPOS tip fields populated inconsistently between sites because every general manager was trained slightly differently.
  • Cash tips logged on paper at the end of the night, then keyed into a spreadsheet on Monday by someone in the back office.
  • Tronc data emailed as an Excel attachment from a single laptop to the payroll bureau every month, with no version control and no encryption beyond the email transport.
  • Networks where the EPOS, the tronc app and the payroll integration all sit on the same flat VLAN as the guest Wi-Fi, which is both a PCI problem and a tip-data integrity problem. A properly segmented managed network is the foundation under all of this.

None of these are catastrophic on their own. Cumulatively, they make it very hard to demonstrate fair distribution if anyone - a worker, an accountant, an employment tribunal - ever asks.

Where a hospitality IT specialist comes in

The role we play in this is not to write the tipping policy or to set the tronc rules. That belongs to operators, their accountants and their payroll providers. Our job is the wiring underneath: making sure terminals are configured correctly, EPOS fields are consistent across sites, integrations between EPOS, tronc and payroll are secure and reliable, networks are segmented, audit logs are retained, and the whole chain can be evidenced when needed. It is unglamorous work and it is exactly the kind of thing that gets quietly skipped when an operator is opening a new site under time pressure.

A necessary disclaimer

Nothing in this article is tax or legal advice. The treatment of tronc, the National Insurance position, the precise wording of your tipping policy and the structure of your scheme are all questions for your accountant and a specialist payroll provider. Get them right with the right professionals. What I am saying is that even a perfectly designed scheme will fall over if the IT underneath it cannot capture, transmit and evidence the data the scheme depends on.

If you are not sure where your estate stands on any of this - and most operators we speak to are not entirely sure - that is a reasonable place to start a conversation. Have a look at our hospitality IT support page, or get in touch and we will walk a site with you.