Hospitality workers accuse bosses of keeping tips for themselves

The research found: 

• One in five staff claim bosses keep all tips for themselves

• Exclusive report reveals hospitality workers left with losses of up to £7,000 a year or £140 a week

• Report follows government plans making it illegal for hospitality firms to withhold tips from workers

The nationwide study reveals that one in five hospitality workers in the UK claim their bosses keep all tips for themselves.

The worrying report follows a government announcement that makes it illegal for restaurant, cafe and pub bosses to withhold tips from hospitality workers, who currently represent around 3.2million employees nationwide, that’s 10% of the entire UK workforce. 

Analysis from financial experts at money.co.uk has revealed that waiters and bar staff believe they lose as much as £140 a week as a result of unfair tip distribution by their bosses and managers, which could amount to £7,000 annually.

More than half of hospitality workers (55.3%) say they “don’t trust” that their boss or manager is honest about the tips they receive, while around one in five (18.6%) believes their boss takes every penny of the tips they earn. 

According to trade association UKHospitality, the hospitality industry contributes £130 billion to the economy each year, with many workers relying on tips to top up their income. 

Today’s data finds that the average UK hospitality workplace earns £1,311 a week in tips, with establishments in Scotland (£1,639) earning more than any other UK region, almost double those in the West Midlands (£888), which comes bottom of the pile.

Despite Scottish customers happily parting with their cash, workers north of the border claim they are shortchanged more than those in any other region, losing out on a whopping £172 each week due to their employers. 

Customers in Manchester are the worst tippers in the UK, according to the research. Hospitality workers in the city take home an additional average of £137 per week. Meanwhile, those in Brighton on the sunny south coast are the best tippers, with workers there taking home a weekly average of £227 in tips. 

There’s also a big difference in tips when it comes to age, with hospitality workers in Gen Z earning the most a week (£211) in tips, which is almost double what baby boomers (£119), who are bottom of the pile, earn in addition to their wage.

James Andrews, senior personal finance expert at money.co.uk, said: “Within the next year, restaurant, cafe and pub bosses will be banned from keeping tips left for staff by customers in Britain.

“Following the change in policy, hospitality staff should in theory be taking home more in tips than ever before, but if you don’t plan properly, then you’re potentially wasting a valuable cash resource. 

“Ensure that you’re making the most of your additional income by putting your tips or any extra cash you have into the right kind of account. Compare savings accounts to see which one works best for you and look at different current accounts and their interest rates and fees, to see if it’s worth changing.

“Switching to a new account can be the easiest way to save or make money quickly, so you should check to see if you could get a better deal somewhere else.

“If your savings goals are longer term, think about ways your money might work harder for you - be that topping up a pension, or a Lifetime ISA that adds government cash to what you save. 

“Tips are generally a bonus to your pay packet, so you should try and see how much can be saved each month. You can do this by making a budget, using a spreadsheet or online calculator to work out where your money goes each month. 

“Once you have worked out how much money you have left over after your expenses, you should think about putting it into a savings account for when you need it.

“One thing to be aware of is that tips count as income for tax purposes. If your tips are added to your pay cheque, that’s all taken care of as they’re taxed in the same way as the rest of your salary. 

“However, if your tips are in cash you might need to fill in a self-assessment tax return to make sure you don’t fall foul of the authorities.  The good news is that this only kicks in if you’re making more than £2,500 a year in cash in hand payments. If you’re worried that might apply to you, you can see whether you need to fill out a tax return or not here.

“Some banks also have a ‘sweep’ facility that moves any money above a limit you set automatically into your savings. Third party apps like Plum and Chip also have automated savings schemes for when you’ve got more money in your account than normal.

“If you want a few more handy tips and tricks about how to kickstart your finances, then take a look at our quick and easy guide here: https://www.money.co.uk/guides/easy-ways-to-kick-start-your-finances.htm.”

Press@money.co.uk