Stay informed with industry news, tips, and practical guides for hospitality professionals.
The first thing to note when talking about service charge in restaurants in the UK, is that service charge is and must be discretionary.
No one can force you to pay service charge in the UK.
If someone is forcing you to pay service or tips, any payment you make must be treated like a sale, and is therefore VATable (if the business is VAT registered). Speak to the restaurant owner if you feel any service charge is being forced upon you by their employees.
Service charge, or service fee, is meant to predominantly go to team members and employees, and especially to those who contributed to you having such a great experience.
Service charge cannot be used to 'top' someone up to minimum wage. Any service charge paid out should be on top of any minimum wage.
Back to the main question; why do restaurants have service charge?
Restaurant use service charge to help pay their employees and staff good wages. These 'pots' of collected service charge are normally distributed through something called a 'tronc scheme'. A restaurant owner should not get involved in the distribution of service charge, and should really only get involved when setting up a 'tronc scheme' with the 'troncmaster' - i.e. the person responsible for managing the tronc.
A well run tronc scheme can benefit the team, rewarding those who work hardest and contribute the most.
A restaurant owner may decide to deduct certain fees from the 'pot' before distributing the service charge, say for example they may decide to deduct the fees they have been charged by their credit card provider in exchange for taking the service charge. Once these fees have been deducted, the restaurant may then distribute the remainder via a 'points scheme' whereby all staff are awarded points based on their job role and contribution. In any given payroll period, these points are tallied up with hours worked (or holiday hours if a team member is away) and then the 'pot' is then divided up accordingly.
Although there is not yet enough legislation to stop a restaurant from taking all of the service and keeping it for themselves, this sort of practice is highly frowned upon. Needless to say they may have a hard time finding anyone willing to work for them! Minimum wage is exactly that - a minimum!
Exploring QSR Franchise Opportunities in the UK Hospitality SectorThe United Kingdom's hospitality sector boasts a diverse landscape of businesses, with one of the most significant being the Quick Service Restaurant…...
Unveiling Successful QSR Examples in the UK Hospitality SectorIn the UK hospitality industry, Quick Service Restaurants (QSRs), commonly known as fast-food establishments, have proven to be an influential sector. This…...
Promotion Ideas for Bars: Tactics for Boosting Business and Attracting CustomersRunning a successful bar is not just about serving top-notch drinks, it's also about creating an atmosphere that keeps customers…...
Revolutionising Restaurant Management: The Rise of Invoice Software in the UK Hospitality IndustryThe UK hospitality industry is a dynamic sector, and within its sphere, the restaurant business is a key…...
Embracing QSR Software for Enhanced Restaurant ManagementIn today's technologically advanced era, the UK hospitality sector, particularly quick service restaurants (QSRs), are increasingly adopting QSR Software and Restaurant Management solutions. Th...
Opening a quick-service restaurant (QSR) is a blast, but it’s not always easy. You’ve got menus to plan, customers to serve, and a budget to stick to, all while keeping…...
