Tips & Service Charges Dispute Letter Template & Generator

If you need to challenge unlawful withholding or pooling of tips and service charges, a written letter is the recommended first step — it creates a clear record and shows you're pursuing the matter formally. Below is what a strong tips & service charges dispute should include, plus a free tool to generate yours.

What this letter needs to cover

• Describe the pooling or withholding arrangement
• State this may contravene the Employment (Allocation of Tips) Act 2023
• Request a full breakdown of how tips are distributed
• Request repayment of any tips unlawfully withheld
• Request a meeting to discuss the policy

Your rights under the Employment (Allocation of Tips) Act 2023

Since this Act came into force, employers must pass on all tips, gratuities, and service charges to workers in full, without deductions (other than tax), and must do so fairly and transparently according to a written policy. Employers can no longer simply keep a share of tips or use them to top up wages to minimum wage level.

What to include before you send it

• The specific practice you're challenging — withheld tips, unfair pooling, or deductions
• Reference to your rights under the Employment (Allocation of Tips) Act 2023
• A request to see your employer's written tipping policy, if one exists
• A request for any wrongly withheld amounts to be paid

What "fair allocation" actually requires

Tips must be distributed in a way that's fair and reasonable between workers — this doesn't necessarily mean exactly equal shares, but the method must be transparent, consistently applied, and not arbitrary. Employers must also have a written policy on how tips are handled, which staff are entitled to see.

Frequently Asked Questions

Can my employer use tips to make up my basic pay to minimum wage?
No — this practice is specifically prohibited; tips must be paid on top of at least minimum wage, not used to reach it.

What if my employer doesn't have a written tipping policy?
They're required to have one under the Act — the absence of one is itself worth raising as part of your complaint.

See our full letter template & generator library for related letters, or use our free checkers for guidance specific to your situation.