Free tool
Tronc NIC Savings Calculator
Tips distributed through a properly constituted, independently run tronc are outside employer National Insurance. Enter your tip pool below to estimate the annual employer NIC your business could save.
Annual tip pool
£130,000
Estimated annual employer NIC saving
£19,500
Equivalent to £488 per tipped employee, per year.
Talk to a troncmasterEstimate only, based on an employer secondary Class 1 National Insurance rate of 15%. Actual savings depend on your scheme structure, the proportion of qualifying tips and each employee's earnings. Income tax remains payable under PAYE.
Frequently asked questions
- How is the employer NIC saving on tips calculated?
- Qualifying tips distributed through an independently operated tronc are not subject to employer secondary Class 1 National Insurance. The saving is your annual tip pool multiplied by the employer NIC rate of 15%. Income tax is still deducted under PAYE.
- Does a tronc scheme remove income tax on tips?
- No. Tips remain taxable income and must be reported through PAYE. A tronc changes the National Insurance treatment, not the income tax treatment.
- What makes a tronc scheme qualify?
- The tronc must be genuinely independent: an appointed troncmaster decides allocation without employer direction, the scheme has written rules, and distribution is documented. Employer involvement in allocation decisions puts the NIC treatment at risk.
- How does the Tips Act 2024 affect this?
- The Employment (Allocation of Tips) Act 2024 requires tips to be passed on in full and allocated fairly, with a written policy and records available to staff. A compliant tronc satisfies the allocation and record-keeping requirements while preserving the NIC position.