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A Tronc is a pay arrangement often used to distribute tips and gratuity amongst employees. Tips via a Tronc can sometimes be exempt from National Insurance.

More detail:

A Tronc is a pay arrangement that allows businesses usually in the leisure or hospitality sectors to fairly share tips, gratuities and service charges among Employees. The word Tronc comes from the french term "tronc des pauvres", which means 'poor boxes'. These boxes were used to collect coins for charitable purposes.

When a tip or gratuity is given, the Tronc pools all the money into a common fund. The troncmaster, who is appointed to control the Tronc, is responsible for managing the Tronc and distributing the funds equally. They are also responsible for reporting information to HMRC and setting up a PAYE system to deduct Income Tax from the payments.

A Tronc is used as it is a fair way of distributing employee tips. It is also used as tips via a Tronc can sometimes be exempt from National Insurance, which benefits staff and businesses.

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