A tronc is a special pay arrangement used in the hospitality and leisure sector, such as bars, restaurants, hotels, or casinos, to fairly share staff tips, gratuities, and service charges given by customers. The word "tronc" finds its roots in 1920s France where "tronc des pauvres", or collecting boxes, were used to accept donations for the poor. A tronc scheme is usually set up to make the most of favorable rules which, subject to meeting certain conditions, allow payments to be made from the tronc free of National Insurance Contributions.
A tronc system can help hospitality operators to ensure compliance with legal requirements around tips, such as the Employment (Allocation of Tips) Bill in the UK, and automate many of the administrative tasks associated with collecting, distributing, and reporting on tips. The troncmaster is the person responsible for sharing tips to staff through a tronc scheme, and the decision to appoint a troncmaster lies solely with the business that wishes to implement a tronc.
The benefits of implementing a tronc scheme include:
- Fair and transparent way of managing tips, gratuities, and service charges
- Potential exemption from National Insurance Contributions
- Greater control and visibility over tips, allowing hospitality operators to better manage their finances and make informed decisions about staffing levels and other business operations
To set up a tronc scheme, business operators should consider carefully the most common ways businesses set up their tronc scheme, such as appointing a troncmaster, registering the tronc with HMRC, and ensuring compliance with legal requirements.
