Copy article

Holiday pay + tips = the next “easy win” claim in hospitality

ended 10. February 2026

If staff earn tips or tronc most weeks, but their pay drops when they take a holiday, you’ve got a risk hotspot — and the new tips rules mean your system is now more visible and auditable.

A recent tribunal case (Palanki v The Big Table Group Ltd - ) looked at whether tronc payments could count as earnings that should be reflected in holiday pay, depending on how the scheme is set up in practice.

Since 1 October 2024, the UK tips legislation expects tips/service charges (where in scope) to be handled fairly and transparently, with records, which can make it easier for someone to challenge what “normal pay” really looks like when they’re on leave.

Quick check

  • Be honest: when your team take holiday, does their pay drop because tips/tronc disappear,  yes or no? What actually happens in your business?
  • Have you ever had someone say (or hint) they avoid booking a holiday because they can’t afford the dip in pay?
  • Who controls tips/tronc where you are — a genuinely independent troncmaster, or is it effectively management deciding the split?
  • Do you have a written tips policy that staff can access easily… or is it currently “we’ve always done it like this”?
  • If an employee asked you today, “How are my tips worked out?” could you explain it clearly in 30 seconds — and show the records without panicking?
  • After hearing about cases like Palanki v The Big Table Group (Las Iguanas), are you planning to review holiday pay for tipped roles — or do you think your current set-up is already solid? (Tell us why.)

 

 

1 responses from the Newspage community

Copy all

Star Quote
Copy

Editor
Kate UnderwoodVerified
Founder & Chief People Strategist at Kate Underwood HR and Training
This is exactly the kind of “small” payroll detail that turns into a big, expensive headache later. If your team earn tips or tronc most weeks, but their pay drops the minute they book a holiday, you’ve got a problem waiting patiently in the wings. And since the newer tips rules, your process needs to be fair, transparent and recorded… which also makes it a lot easier for someone to challenge what “normal pay” should look like when they’re off. My litmus test is simple: does taking annual leave financially punish the person taking it? If yes, you need to review it. Don’t wait for a claim, a staff walkout, or a tribunal letter to force your hand. If you’re a small business and thinking “I’m not even sure how our tronc works if I’m honest”… you’re not alone. But now’s the time to tidy it up: get your tips policy clear, get records in place, and sanity-check holiday pay for roles where tips are regular.