Tronc Calculator
What a properly run tronc saves in National Insurance, and how the pot lands across your team.
NIC rates change every April, so they are inputs rather than assumptions, check the current figures before relying on the result.
The full amount collected. Under the Tips Act this all belongs to workers. See the questions below.
Secondary Class 1. Confirm the current rate, this changed in April 2025 and may have moved again.
Primary Class 1 main rate. Staff above the upper earnings limit pay less on the excess.
12 for monthly, 13 for four-weekly, 52 for weekly. Used for the annual figure only.
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How the saving is worked out
Compare two ways of getting the same money to the same people:
- As wages, the employer pays employer NIC on top, and the employee pays employee NIC out of it. Income tax applies either way.
- Through a compliant tronc, income tax applies, no NIC on either side.
So the saving is:
- Employer NIC saved = pot × employer NIC rate
- Employee NIC saved = pot × employee NIC rate, money that stays with staff rather than reaching HMRC
The allocation is separate arithmetic: value per point = pot ÷ total points, where total points counts every head. A role with three people on seven points each contributes 21 points to the pool.
A worked example
A single site collecting £24,000 of tips and service charge in a month, with employer NIC at 15% and the employee main rate at 8%:
- Employer NIC saved = £24,000 × 15% = £3,600 a month
- Employee NIC that stays with staff = £24,000 × 8% = £1,920 a month
- Combined, over twelve months = £66,240
The employer number is the one that usually gets attention, but the staff number matters more than it looks: it is a pay rise that costs the business nothing, which is a rare thing to be able to offer.
Common questions
Why does a tronc save National Insurance at all?
Because tips allocated by a genuinely independent troncmaster are not earnings paid by the employer for NIC purposes. Income tax is still due and still runs through PAYE, the exemption is National Insurance only, employer and employee.
The word doing the work is independent. If the employer decides who gets what, it is not a tronc, whatever it is called, and the exemption does not apply.
What actually makes a tronc independent?
The troncmaster must decide allocation without the employer directing it. In practice HMRC looks at who sets the rules, who can change them, whether the employer can overrule an allocation, and whether the arrangement is documented and followed.
Common ways it fails: the general manager is the troncmaster and reports to someone who overrides them; the finance team quietly adjusts allocations; the scheme exists on paper but the owner decides the split. Each of those turns the whole pot into ordinary earnings, with employer NIC due, usually retrospectively, with interest.
Can I deduct card processing fees from tips?
No. Since the Employment (Allocation of Tips) Act came into force in October 2024, qualifying tips must be passed to workers in full. Card fees, breakages and till shortages cannot be taken out of them, and the pot in this calculator is the full amount collected for that reason.
Deducting anything other than tax from qualifying tips is the most common breach we see, and it is usually a leftover process nobody revisited rather than a decision.
Does a points system have to look like this?
No. Points by role are the most common approach, but hours worked, a hybrid, or per-site pools are all used. What matters is that the method is fair, written down, applied consistently, and available to staff, the Act gives workers the right to see the policy and to request their own records.
Do the NIC rates here stay right?
They change, typically every April, which is why they are inputs rather than baked in. The defaults reflect employer NIC at 15% and the employee main rate at 8%, but confirm both before quoting a saving to anyone.
The figures also ignore thresholds: nobody pays NIC on the first slice of earnings, and employees above the upper earnings limit pay a lower rate on the excess. For a whole-pot estimate that is close enough; for an individual it is not.
Is a tronc worth setting up for a single site?
Often yes, the saving scales with the pot, not the number of sites, and the compliance obligations under the Tips Act apply either way. Whether it is worth it depends on how much you take in tips and how much administration you can absorb. Run your own number above and it usually answers itself.
Rates and thresholds shown are for 2026/27, correct as at 6 April 2026 for England. They are editable above, confirm the current figures before relying on any output.
An estimate to help you think, not advice on your own business. The numbers depend on assumptions only you can confirm, talk to us before you act on them.
We act as independent troncmaster for hospitality groups
Scheme design, allocation, payroll and the documentation that stands up if HMRC asks. Independent in substance, not just on paper.