Payroll, auto-enrolment and a written tips policy
Two separate duties sit alongside your PAYE payroll setup: enrol eligible staff into a workplace pension scheme (auto-enrolment) using The Pensions Regulator's duties checker, and put a written policy in place for how tips, gratuities and service charges are allocated and distributed fairly.
Two separate duties sit alongside your PAYE payroll setup: enrol eligible staff into a workplace pension scheme (auto-enrolment) using The Pensions Regulator's duties checker, and put a written policy in place for how tips, gratuities and service charges are allocated and distributed fairly. If your venue routinely takes tips, the policy is a legal requirement, not just good practice.
Missing your pension staging duties brings automatic fines from The Pensions Regulator, scaling with how long you ignore it. Since October 2024, mishandling tips — deducting from them, delaying payment, or having no fair allocation policy — is directly enforceable at employment tribunal under the Employment (Allocation of Tips) Act 2023.
The Pensions Regulator's new-employer hub — tells you your staging date and what to set up.
Statutory code — use it to write your written tips policy.
Who this is for
Any venue taking on staff (pension duties) and any venue where tips, service charges or gratuities are given more than occasionally (tips policy).
Auto-enrolment duties start from your first PAYE employee; the tips code applies once tipping happens with any regularity, not just for venues with a service charge.
What you’ll hold
- Pension scheme enrolment confirmation
- Written tips allocation policy
- Tips distribution records
Watch out for
- Assuming auto-enrolment doesn't apply because staff are part-time or casual — eligibility is based on age and earnings, not contract type, and even opted-out staff have to be reassessed periodically.
- Pooling tips across multiple sites or deducting card processing fees from them before distribution — both are exactly what the 2024 code is designed to stop.
- Having no written tips policy at all because tips feel informal — once tipping happens more than occasionally, a written policy is a legal requirement, not optional.
Sources
- The Pensions Regulator — New employers checked 2026-09-02
- GOV.UK — Distributing tips fairly (revised statutory code of practice) checked 2026-09-08
See also
This is item 51 of 66 in the free UK Launch Checklist. See the whole list →