Simplifying tip collections
Setup individual tips or troncs and make your tip management simple, compliant and fast.
Tipping journeys
We know how complex things can get with collecting tips. Lot’s of rules and laws to follow, new obligations to fulfil and compliance to track. Luckily, EasyTip makes all this a breeze. We are not tax and compliance advisors but the platform is designed with all the latest regulations in mind. This means that EasyTip can increase tips collection and simplify tips distribution for businesses and their teams. To help you define your required setup we’ve outlined a few example configurations. If you don’t see a set-up that relates to your case, don’t worry we can still help you - just get in touch with us.
- Individual
- Common
💼 Case One - Individual
Mr A owns a salon and wants to enable its members of staff to collect tips. However Mr A does not want to collect or distribute tips. Mr A also doesn't want to report tips through existing PAYE in order to reduce accounting administration.
🎯 Solution
Mr A recommends their team to sign up to EasyTip's Individual Self-reporting tips collection setup. This ensures that all tips are classed as cash and flow directly to each staff member. Such tips are exempt from National Insurance Contributions and are not "qualified tips" as defined by the Tipping Act, therefore exempt from it.
As tips by-pass Mr A's business, Mr A will have no HMRC reporting obligations. Each staff member will be responsible to report their income directly to HMRC.
💼 Case Two - Individual
Mr B owns a salon and wants to enable its members of staff to collect tips. Mr B does not want to collect or distribute tips, however Mr B is happy to assist member of his team to report income from tips via existing PAYE scheme in order to alleviate reporting obligation from his team.
🎯Solution
Mr B recommends to his team to sign up to EasyTip's Individual Employer-reporting tips collection setup. This ensures that all tips are classed as cash and flow directly to each staff member. Such tips are exempt from National Insurance Contributions and are not "qualified tips" as defined by the Tipping Act, therefore exempt from it.
In order to report income and pay related taxes, Mr B receives a summary of all tips from EasyTip and reports them via PAYE. Taxes due from income from tips are deducted from staff salaries. Mr B must ensure that deducted taxes do not lower staff salaries below minimum wage requirements.
💼 Case Three - Individual
🎯 Solution
Mr C recommends to his team to sign up to EasyTip's Individual Employer-reporting tips collection setup. Customers choose members of staff they want to tip and make a payment. Tips are transferred to the business at the end of a week or a month, along with an allocation report for each staff. Mr C distributes tips as per allocation report and pays taxes via PAYE.
Whilst Mr C doesn't influence distribution, tips do flow through Mr C's business which creates a more likely NIC obligation. In addition, Mr C will need to comply with the Tipping Act as such tips would be defined as "qualified tips", therefore not exempt.
💼 EasyTip Tronc I
Mr. D owns a restaurant and wants staff to receive tips, without adding service charges or accepting card tips via terminal. He wants tips to be handled fairly and outside of his business operations.
🎯 Solution
Mr D signs up to EasyTip and chooses EasyTronc I setup. Staff appoint a troncmaster, who sets the allocation method (based on hours, percentages, or points). Customer tips are pooled on the EasyTip platform, and the troncmaster allocates them. EasyTip then distributes tips to each person and provides the allocation report to Mr. D. These tips are exempt from National Insurance but qualify as "qualified tips" under the Tipping Act.
Mr D reports income from tips and pays related taxes via existing PAYE. Mr D must ensure that deducted taxes do not lower staff salaries below minimum wage requirements. To comply with the Tipping Act, Mr. D uses EasyTip to provide employee data and generate a Tipping Policy.
💼 EasyTip Tronc II
Mr. E owns a restaurant and wants staff to receive tips, without adding service charges or accepting card tips via card terminals. Mr E doesn't want to collect tips but wants the distribution to take place via existing PAYE. Mr E wants to establish a fair process for all staff members.
🎯 Solution
Mr E signs up to EasyTip and chooses EasyTronc II setup. Staff appoint a troncmaster, who sets the allocation method (based on hours, percentages, or points). EasyTip transfers tips to Mr E's business account and sends Mr E the troncmaster's allocation report. These tips are exempt from National Insurance Contributions but are considered as "qualified tips" as defined by the Tipping Act.
Mr E distributes tips and pays related taxes via existing PAYE. To comply with the Tipping Act, Mr E uses EasyTip to provide employee data and generate a Tipping Policy.
💼 EasyTip Tronc III
Mr. F owns a hotel and collects service charges for staff, with a tronc scheme in place for fair distribution. He wants to add cashless tipping to collect tips for housekeeping and room service staff in the hotel.
🎯 Solution
Mr. F signs up for EasyTip with the EasyTronc III setup. Tips are pooled on the EasyTip platform and transferred to his business account, where the troncmaster allocates all tips (both service charge and EasyTip tips). These tips are National Insurance exempt and qualify as "qualified tips" under the Tipping Act.
Tips are distributed through a separate or existing PAYE scheme. EasyTip helps Mr. F comply with the Tipping Act by providing employee data and generating a Tipping Policy. generator.
💼 EasyTip Tronc IV
Mr G owns a restaurant and collects service charge for members of staff. Mr G wants to distribute collected funds via EasyTip in order to establish a fair and transparent distribution.
🎯 Solution
Mr G signs up to EasyTip and chooses EasyTronc IV setup. Members of staff appoint a troncmaster (internal or external) and decide on allocation methodology (hours, percentages, points). Troncmaster allocates and distributes all service charge via EasyTip. Such tips are exempt from National Insurance Contributions but are considered as "qualified tips" as defined by the Tipping Act.
Mr G reports income from tips and pays related taxes via existing PAYE. Taxes due from income from tips are deducted from staff salaries. Mr G must ensure that deducted taxes do not lower staff salaries below minimum wage requirements. To comply with the Tipping Act, Mr G uses EasyTip to provide data for all employees and EasyTip's Tipping Policy generator.
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