Essentially, a tronc is an arrangement for the pooling, allocation and distribution of tips and gratuities. Leaving tips seems rather easy to understand – we pay a little extra on our bill and expect that money to be distributed to staff, right? Speak to anyone who processes tips fairly and consistently as part of an employees pay, and they will likely tell a different story.
Consider who has been a part of earning the tip – front of house / back of house / head office. Now consider factors such as credit card tips, deduction fees, the separate tax codes and PAYE references for employee’s payments. These are just a couple of reasons why the handling of tips can lead to mistakes. When HMRC come knocking, the consequences for getting it wrong can be severe.
As the waters between earnings and tips become muddier and HMRC cast an ever-closer eye over how hospitality businesses handle tronc, the role of a troncmaster is becoming ever more popular in the hospitality industry.
The troncmaster is the person or group that operates a tronc on the operators’ behalf. Having a troncmaster can ultimately save both a manager and payroll officer huge amounts of time and hassle, since all the distribution of tips, gratuities and service charges are dealt with by someone else. The ‘troncmaster’ is often extremely well equipped with knowledge on how to best deal with legislation surrounding the tronc system, as it can be rather cloudy and grey to properly understand the relationship between tronc money, employees, employers and HMRC.
Another reason why troncmasters are playing an increasingly popular role is a recent change in the rules on who can and cannot operate a tronc. While it is perfectly ok for waiters to arrange the tronc policy themselves, anyone who is a manager or above aren’t allowed to operate the tronc. The solution is to arguably hand responsibility to the 3rd party troncmaster.
Employees may benefit through yet another element of a tronc system, the tronc pot. Let us use the example of a friendly waiter who we will call Toby. Toby earns £8.50 an hour but also has an uplift of £11 that includes tips, but what would happen if the business didn’t make enough tips? Where would that remaining uplift come from? This is where a tronc pot really lives up to its role. Say on previous weeks in the year the business made an abundance of tips surpassing their overall uplift. This surplus of tronc could either be distributed to employees or enter a tronc pot, which is up to the troncmaster. Let’s go back to our previous example of Toby, who has a promised uplift of £11 an hour but didn’t actually make that much in tips for that given week. Through a tronc pot, a troncmaster can use these funds from a surplus of tips in one week to make sure an employee receives their uplift for another week, thus leaving our Toby satisfied.
The use of tronc is still a very grey area in the hospitality industry, but the benefits of a tronc system are really starting to become increasingly apparent and clear. S4labour can help facilitate the distribution of tronc to employees, saving managers the time and hassle of organising payroll to account for tips. S4labour can facilitate tronc on a daily and/or weekly basis seamlessly, again saving time for senior staff members in the hospitality industry. If you’d like to hear more about what we offer or have complex tronc requirements, please get in touch with us today.