How TiPJAR Can Help Hospitality Operators Navigate the NICs Threshold Changes

How TiPJAR Can Help Hospitality Operators Navigate the NICs Threshold Changes

A thought leadership piece by Dan Hawkie, Chief Commercial Officer at TiPJAR

The UK hospitality sector is facing yet another financial challenge, with over 774,000 hospitality workers set to be dragged into the new National Insurance Contributions (NICs) threshold from April 2025. This shift will cost the industry a staggering £1 billion, according to UKHospitality. As a sector already grappling with cost pressures, workforce challenges, and regulatory changes, these new NICs rules could significantly impact businesses’ bottom lines and ability to operate efficiently.

At TiPJAR, we understand the critical challenges this presents for hospitality operators. With the new Employment (Allocation of Tips) Act already creating ripples across the industry, operators need practical, compliant solutions to mitigate risks and streamline their operations. That’s where TiPJAR comes in. 

Here’s how we can help:

1. Automating Tronc Processes to Reduce NICs Impact

One of the key pain points for operators is managing Tronc schemes—a complex area that’s critical to ensuring compliance with NICs rules. TiPJAR’s automated Tronc solutions:

  • Eliminate Manual Errors: By automating the distribution of tips and service charges, we reduce the administrative burden and ensure accuracy in NICs reporting.
  • Reduce NICs Liability: Our compliant Tronc system ensures that eligible tips are excluded from employer NICs, reducing financial strain.
  • Enhance Transparency: Our platform provides clear, real-time reporting for both operators and team members, fostering trust and reducing disputes.
2. Increasing Tips as a Supplemental Income Source

With the NICs threshold changes, offering team members a supplemental income stream has never been more crucial. TiPJAR’s technology allows businesses to:

  • Boost Team Earnings: Empower employees to collect digital tips directly from customers, increasing their take-home pay without raising operational costs.
  • Drive Team Motivation: Higher tips lead to happier, more motivated teams, resulting in better customer experiences.
  • Simplify Tip Distribution: Our platform ensures tips are distributed fairly and transparently, improving staff satisfaction and retention.
3. Ensuring Compliance with the New Employment (Allocation of Tips) Act

Compliance is a top priority for operators as the new Employment (Allocation of Tips) Act takes effect. TiPJAR’s platform ensures:

  • Legal Compliance: Tips and service charges are allocated fairly and in line with the law, reducing the risk of fines or legal challenges.
  • Audit-Ready Records: Our system provides detailed records of tip allocation, ready for audit at any time.
  • Peace of Mind: Operators can focus on running their business, knowing their tip distribution complies with the latest regulations.
Facing Challenges Together

The upcoming NICs changes are undoubtedly a significant challenge for the hospitality sector, but they also present an opportunity to rethink and optimise how tips and Tronc schemes are managed. At TiPJAR, we’re committed to supporting operators through this period of transition, helping them stay compliant, reduce costs, and keep their teams motivated.

If you’re looking to future-proof your business against these changes, get in touch with us today to learn how TiPJAR can help.

Book A Demo

Book a chat with us today and hear how TiPJAR® software can help your business grow!

Meet TiPJAR: Your Pub’s Best Friend

Pubs & Bars

Meet TiPJAR: Your Pub’s & Bar's Best Friend

Empower your staff, increase their earnings, and create a seamless tipping experience.

Why TiPJAR is a Game-Changer for the Pubs and Bar Industry

TiPJAR is transforming the pubs and bar industry by offering a modern, transparent, and efficient way to handle tips, benefiting staff, customers, and owners alike. It provides a fair and transparent system where tips are directly allocated to staff. This transparency boosts employee trust and satisfaction, leading to higher morale and reduced turnover.

By simplifying the tipping process and eliminating cash handling, TiPJAR streamlines operations, saving time and reducing administrative burdens for managers. 

TiPJAR also ensures compliance with tax laws, reducing the risk of legal issues and ensuring tips are managed correctly. This system not only benefits the staff but also provides valuable data insights into tipping patterns and customer behaviours, helping businesses make informed decisions.

Ultimately, TiPJAR enhances the working environment for staff, improves the customer experience, and drives operational efficiency. By addressing the key challenges of tipping in the industry, TiPJAR is a vital tool for pubs and bars looking to thrive in a competitive market.

TiPJAR® Accounts
1
Registered Users
0
Tips Processed Annually
£ 0.1 M+
Transactions
1 M+

Why TiPJAR? Because Your Pub Deserves More!

100% Compliant

With TiPJAR you know you are 100% compliant with the Fair Tips Act

Mitigate risk of NI contributions

By being 100% compliant you also mitigate the risk of NI contributions and employee tribunials

save thousands

Save thousands on 13.8% employer national insurance contributions

save time and resources

Save time and resource and minimise human error by automating the whole process

Increased retention

Better attract, engage and retain your team members with fair and transparent tipping and weekly payouts

Improve service levels

Improve service levels and increase upsells with tips directly linked to performance

The products for your business

TiPJAR connect

With TiPJAR Connect, we bring effortless integration into your existing card machines or apps, enabling a single transaction experience for your customers.

TiPJAR tik om te tippen

Tap to tip machines

TAP TO TIP™ provides your customers with a convenient way to express their appreciation for impeccable service.

TiPJAR QR Code

Digital Tipping

With our transparent Distribution Engine, funds are distributed fairly based on hours worked, and who was working at the time the tip was received.

Supertronc

Revolutionising the way businesses share card tips and service charge

Digital Tipping

Perfect for small venues and takeaways

Tap To Tip™

Perfect for independent pubs, bars and coffee shops

Supertronc

Revolutionising the way businesses share card tips and service charge

TiPJAR Connect™

Plug & play into your existing tech stack

TiPJAR Labs™

Our rails for tipping, in your apps

Driving positive feedback

Since the introduction of TiPJAR, BrewDog has seen a significant increase in mystery diner feedback points, reflecting a remarkable improvement in customer experience. The mystery diner scores increased by 15%. This impressive leap can be attributed to the heightened engagement and motivation among BrewDog’s staff. With the introduction of TiPJAR, employees have become more invested in delivering exceptional service, and creating memorable experiences for every guest.

At BrewDog, it’s recognised that customers are the lifeblood of the business, but it’s the dedicated team that ensures those customers return time and time again.

Discover the full impact TiPJAR had on brewdog

Tips vs Tronc, what’s right for me?

At TiPJAR we try and break it into two areas: 

Tronc– Effectively employer received tips, tips that are physically taken by the business (credit card tips, service charge or even cash taken in the “till”). The business is liable for the taxation and potentially National Insurance on this format of tips. 

Cash/cash equivalent tips – traditional cash tips that team members decide on where it goes, whether it goes straight into their pocket or in a shared pot to be divided amongst the team OR digitally received tips that do not hit the business accounts. The business is not liable for tax or National Insurance on these tips. 

TiPJAR’s guidance for dealing with either set of tips: 

Tronc – This is where you need to comply with The Employment (Allocation of Tips) Act that goes live on 1st October. You don’t have to go with an external troncmaster to comply but there are big benefits, as detailed by the testimonials you saw in my previous email. 

Cash equivalent tips – In a “cashless society” most operators have decided to implement tronc schemes BUT there are other options. TiPJAR has HMRC clearance on a number of cash equivalent format tips with our Tap to Tip devices, integrations to app or credit card machines and digital tipping which means that you and your teams are not missing out on the benefits of what higher tip volumes bring.  

Ready to take the next step?

Are you ready to enhance employee satisfaction, boost retention rates, and optimise tip distribution in your hospitality business? Take the first step towards achieving these goals with TiPJAR. Our innovative platform empowers businesses like yours to create fair and transparent environments while maximising staff earnings. Don’t let outdated processes hold you back – schedule a demo today to see how TiPJAR can revolutionise your operations and elevate your team’s success!

Book A Demo

Book a chat with us today and hear how TiPJAR® software can help your business grow!