What changed in October 2024
The Employment (Allocation of Tips) Act 2023 came into force on 1 October 2024, along with a statutory Code of Practice. Together they require employers to:
- pass on all qualifying tips and service charges to workers, with no deductions beyond limited cases such as income tax;
- allocate them fairly, and have a written tipping policy;
- keep a record of tips received and how they were distributed, retained for three years;
- pay them out by the end of the month following the month the customer paid;
- apply all of this to all workers, with the Act expressly extending it to eligible agency workers.
The government estimated the change would protect the tips of more than two million workers, and its own factsheet puts the sum at around £200 million of tips a year that employers had previously retained.
Card payments count
This is the question people ask most, because the old suspicion was that card tips vanished into the business while cash reached the table. The Code is explicit that the payment method does not determine whether a tip qualifies, and that employers are likely to receive tips paid by card. Service charges are squarely covered: the Code defines one as an amount added to the customer's bill before the bill is presented.
What the law does not do
It does not stop a restaurant adding a service charge, and it does not set the rate. It does not require the charge to be split evenly, only fairly — a distinction that leaves room for kitchen and front-of-house shares, hours worked, and role. And it does not require anyone to tell you, the diner, how the money is divided. Fair allocation is owed to the staff, not to the customer.
What's changing next
Section 14 of the Employment Rights Act 2025 adds a consultation duty: employers will have to consult staff before setting or revising a tipping policy, review it at least every three years, and give workers a written anonymised summary of the views expressed.
As of late September 2026 this is not yet in force. The government is consulting on a revised Code — the consultation opened on 19 August 2026 and closes on 29 September 2026, after an earlier draft was withdrawn in July 2026 following union objections. Its own documents give slightly different target dates — the implementation timeline says by the end of 2026, while the consultation says late 2026, subject to Parliament approving the revised Code. Take the date as approximate until commencement regulations actually appear.
So should you still tip on top?
Entirely your call, and the law is neutral on it. What has changed is that the old argument for tipping in cash — that it was the only way to be sure the money reached the person who served you — carries much less weight than it did before October 2024.
What the law still doesn't give you is advance notice that a charge is coming at all. That part is what this directory is for.
General information, not legal advice — and note that the tipping rules are addressed to employers, so anyone dealing with their own workplace situation should take proper advice.