Tips and service charges in Ireland: your rights under the 2022 Act

Until the end of 2022 Irish law said almost nothing about tips. An employer could pool card tips, keep part of them, or quietly use them to top up wages, and the only comeback was the contract. The Payment of Wages (Amendment) (Tips and Gratuities) Act 2022, in force since 1 December 2022, changed that. This guide explains what the Act gives you, what it does not, and how to use it if tips you earned are not reaching you.

The five things the 2022 Act does

The Act amends the Payment of Wages Act 1991 and sits alongside it. In summary, it:

1. Bans an employer from using tips or gratuities to make up your contractual wages or the minimum wage.
2. Requires tips and gratuities paid electronically (by card, app or any means other than cash direct to you) to be distributed to employees in a manner that is fair in the circumstances.
3. Requires the employer to have a written policy on how tips and service charges are distributed and to display it where customers can see it.
4. Treats a mandatory service charge, or any charge a customer would reasonably take to be a tip, as a tip that must be distributed.
5. Requires the employer to give you a written statement of the tips distributed and your share within 10 days of distributing them.

Each of those is a right you can take to the WRC. The sections below take them in turn.

Tips cannot make up your wages

This is the rule the Act leads with and the one that matters most for low-paid work. Your contractual pay, and the minimum wage underneath it, must be paid from the employer's own money. An employer who says "your rate is €12 plus tips brings you up to the minimum" is doing what the Act bans. In 2026 the minimum wage is €14.15 an hour for people aged 20 and over, with lower rates at 19, 18 and under 18, and the only non-pay item that can be counted towards it is a fixed board or lodging allowance set by the Minister. Tips are not pay for that purpose.

If your payslip shows tips being used to reach your contractual rate, or your hourly pay without tips is below the minimum, the minimum wage tool shows the shortfall and the overtime guide explains the pay reference period check.

Electronic tips must be distributed fairly

Card and app tips go to the employer's account first, which is why the Act regulates them. The employer must distribute them to employees "in a manner that is fair in the circumstances". The Act lists factors an employer may take into account in deciding what is fair, including the seniority or experience of the employee, the value of sales generated, the number of hours worked, whether the employee is full-time or part-time, the employee's role in providing the service, and whether the tip was given to a particular person. A tronc or points system that uses those factors is lawful. A system that sends all the tips to the manager, or splits them with the owner's family members who do not serve, may not be.

The employer itself can retain a share of electronic tips only where it, or a person acting for it, actually did work that the tip was given for, and only to the extent of that work. An owner who serves tables on a Saturday can take a Saturday share; an owner who does not cannot take any.

Cash tips

Cash handed directly to you is yours. The Act does not require an employer to collect and redistribute cash tips, and it does not stop staff from pooling them among themselves by agreement. What the employer cannot do is demand that you hand cash tips over, or count them against your wages. A workplace rule that cash tips go into a pot the employer controls is a distribution of tips by the employer and has to meet the fairness test above.

Service charges

Many restaurants add a service charge to the bill, and customers generally assume it goes to staff. The Act makes that assumption the law. A mandatory service charge, and any charge a customer would reasonably take to be a tip, must be treated as a tip and distributed to employees in the same fair manner. A business that wants to keep a service charge for itself has to make clear to customers that it is not a tip or gratuity. If your employer charges 12.5% "service" and none of it reaches you, that may be a breach, and the displayed policy (next section) is the first thing to check.

The displayed policy

Employers covered by the Act must display a notice, where customers and staff can see it, stating how tips, gratuities and service charges are distributed. The Act applies to sectors where tipping is common, including hospitality, tourism, hairdressing and beauty, taxi and delivery services, and others set by regulation. If you work in one of those and there is no notice, that is itself a breach. If there is a notice, keep a photograph of it: it is the employer's own statement of what should happen to your tips.

Electronic ordering and payment systems should also tell the customer what happens to a tip they add, which is why many card terminals now show a line about the tips policy.

The statement within 10 days

Each time the employer distributes electronic tips, it must give you a written statement within 10 days showing the total amount of tips received by the employer in the period and the amount paid to you. The statement can be on your payslip or separate. It is the document that lets you check whether the distribution matches the policy, and a missing statement is a complaint in its own right. If you have never received one, ask for it in writing: the request itself often prompts an employer to tidy up its system.

Tax on tips

The 2022 Act is about who receives the tip, not about tax. Tips are income. Tips paid through payroll are subject to income tax, USC and PRSI at source, which is why a card tip of €10 arrives as less than €10 in your pay. Cash tips are also taxable in principle, though in practice they are rarely recorded. If your employer runs tips through payroll, your payslip should show them as a separate line from wages so that the "tips cannot make up wages" rule can be checked.

What the Act does not do

Three gaps are worth knowing:

• It does not fix a percentage. "Fair in the circumstances" is a standard, not a formula, and an employer has latitude in designing a tronc as long as it uses relevant factors and applies them consistently.
• It does not cover every business. The listed sectors are those where tipping is customary; the Minister can add more by regulation.
• It does not make tips part of your contractual pay. Tips are not counted for holiday pay, sick pay, notice pay or redundancy, because they are not remuneration from the employer. Your rights on leaving a job are set out in the holiday pay on leaving guide.

Raising it at work

Most tips disputes start with a conversation and a written note. Ask, in writing, for the tips policy, the statements for the last few distributions, and an explanation of how your share was worked out. Keep a record of the shifts you worked and, where you can, the card tips you saw go through. If several colleagues have the same concern, raising it together carries weight, and a union representative can raise it for you.

The WRC route

A complaint about tips is made under the Payment of Wages Act 1991 as amended by the 2022 Act. There is no fee and you can represent yourself. The WRC can direct the employer to comply with the Act, order payment of the tips you should have received, and award compensation. Reported figures are on the awards page.

The complaint must be made within 6 months of the contravention. Each distribution that short-changed you is a separate contravention, so the 6 months run from the most recent one, and earlier ones within the window can be included. The limit can be extended to 12 months for reasonable cause and never beyond. The WRC deadline checker gives you the date.

You cannot be penalised for asking about your tips, for making a complaint, or for giving evidence. Penalisation is a separate complaint under the Act, and a dismissal for exercising a statutory right needs no minimum service under the Unfair Dismissals Acts 1977 to 2015.

Where this leaves you

Electronic tips are yours to share fairly, a service charge is a tip unless the business tells customers otherwise, nothing a customer leaves can be used to make up your wages, and you are entitled to a displayed policy and a statement within 10 days. If any of those is missing, ask in writing first, keep the reply, and use the WRC deadline checker to fix the last date for a complaint, which runs 6 months from the most recent distribution that fell short.