UK Salon Owners Guide to Tipping Laws, Tax and Compliance
Are you prepared?
Get your salon ready for the UK’s new tipping laws
Here’s what you need to know
The Employment (Allocation of Tips) Act is expected to come into effect in October 2024.
The legislation applies to ’employer-received’ tips
– i.e. tips paid by card.
According to the legislation, employers must:
- Fairly allocate 100% of tips to employees
- Ensure appropriate taxes are paid on tips
- Pay out all employee tips within one month
- Have a written tipping policy
- Maintain tipping records for three years
Employees can complain to the employment tribunal if you have not complied with the Act
Want to know more?
Download our full guide for free
Phorest is one step ahead to support you
Introducing… PhorestTips
Phorest makes things easier by sending each employee their tips straight to their bank account, so they are not ‘employer-received’. Stylists and therapists get their tips into their account instantly, at no cost to the business.
A Win-Win for Clients, Business Owners & Your Team
5 Reasons You’ll Love PhorestTips
Instant compliance with the new tipping laws
You won’t need to worry about the legislationTax savings for you and your employees
No National Insurance contributions or tronc scheme fees apply, since card tips are collected directly by employeesEmployees get their tips instantly
Stylists and therapists receive tips into their accounts instantly, without the need for cash or QR codesA seamless personal touch for clients
A simple, thoughtful way for clients to show their appreciation
Your team will 💚 it
On average, stylists and therapists see a 25% increase in tips when using an integrated PhorestPay Card Terminal
Here’s how PhorestTips compares to tipping apps.
Feature Comparison
EasyTIp
TipJar
StrikePay
Built specifically for the industry
Pay & tip in a single, seamless transaction
No QR code chaos for your clients
Automatically and fairly split tips between multiple service providers
Set-up fee
Free
£0
£99
£0
Monthly fee
No additional
£20
£60
£1.95
per employee
Transaction fees
(paid by the tipping customer)
5%
3.3%
6.5% + 20p
Up to
6% + 86p
PhorestTips is an ideal tipping solution for salon teams of all kinds,
including those that have self-employed stylists or therapists.
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Not yet with Phorest?
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Calculate your monthly savings with PhorestTips
See how PhorestTips compares to your other options for remaining compliant.
Use the slider to input the total monthly tips taken across your employee base*.
£500
Paid by client via
Standard card
Standard card
PhorestPay card
Cash
Paid to employee via
Payroll
Tronc scheme
PhorestTips
Cash***
Employer taxes & fees
£13.80
£100**
none
none
Employee taxes
£32.00
£20.00
£20.00
£20.00
Retained tips
£68
£80
£80
£80
* This example assumes the employee is a basic rate tax payer – i.e. earning between £12,750 and £50,270 per year
**This is an estimate – Tronc scheme fees can vary based on salon size and intricacies of the agreement
***Does not cover tip jar / pooled tips, as these would be considered ’employer-controlled’ so fall under the tipping legislation
Want these savings?
Already with Phorest?
Get more info
Not yet with Phorest?
Book a demo