In 2024 the UK Government released an updated “Code of practice on fair and transparent distribution of tips” which aims to ensure that tips, gratuities, and service charges are fairly distributed to workers.
Introduced under the Employment (Allocation of Tips) Act 2023 (referred to as “the Tipping Act”), mandates that employers pass all tips to workers, with minimal deductions (e.g., for tax). Employers must distribute tips transparently and maintain a clear written policy on how tips are handled. Workers also have the right to access records of tip distributions. The code provides guidance on what constitutes fairness, transparency, and how to address any disputes.
To aid our merchants with these best practices, Register now supports the ability to add Service Charges to transactions, Service Charges are treated as tips and applied to the staff member carrying out the transaction and differ to Surcharges which are typically an extra charge for certain circumstances that do not contribute to gratuity.
Service charges can be configured in the Web Portal by a monetary amount or a percentage of the transaction, they can be configured to be added to transactions automatically as soon as an item has been added or manually if preferred.
There is now also a gratuity specific Tipping Report available in the Web Portal, this report will provide a summary of the total tips for each staff member within a given time period, the report also details each individual tip and includes the date, time, transaction total, tip total and tip type within the time period.
This report will be highly valuable to merchants as it offers the transparency required by the Tipping Act, providing a detailed account of all tips and service charges processed through the tills, without any bias.
For more information on the changes to the regulations around tipping, please see the following links:
https://www.gov.uk/government/news/millions-to-take-home-more-cash-as-tipping-laws-come-into-force