Payroll for Hospitality Businesses: What UK Employers Must Know

Running payroll in hospitality means more than just paying staff. With tips, split shifts, casual hours, and high staff turnover, mistakes are common—and expensive.

Here’s how to stay compliant and run payroll smoothly for your UK hospitality business.

Who This Applies To

• Restaurants

• Pubs

• Cafes

• Hotels and B&Bs

• Takeaways

• Catering companies

• Bars and event venues

If you pay staff on PAYE or need to handle variable hours, this guide is for you.

1. Handle Variable Hours Correctly

Hospitality workers often:

• Work different hours each week

• Work split or late-night shifts

• Take last-minute time off

You must:

• Track hours accurately

• Calculate pay per shift or rota

• Submit correct figures to HMRC through RTI

Avoid estimates—HMRC requires actual pay data per pay period.

2. Manage Tips and Tronc Properly

Tips can be paid:

• Directly by customers (not taxable through payroll)

• Through payroll (must be included in gross pay)

If you use a tronc system:

• Assign a troncmaster

• Report all PAYE income via payroll

• Deduct NICs where required

Troncs are subject to PAYE but not employer NICs if structured correctly.

3. Process Starters and Leavers Quickly

High staff turnover means:

• More P45s

• More new starter checklists

• Frequent changes to tax codes and payroll records

You must:

• Add new staff to payroll before first payday

• Issue P45s immediately upon leaving

• Keep RTI records accurate

4. Ensure Holiday Pay Compliance

Even casual or zero-hour staff are entitled to paid holiday.

Options:

• Accrue 12.07% of hours worked

• Calculate based on average pay over 52 weeks

Holiday pay must be shown clearly on payslips.

5. Auto-Enrol Staff in a Pension

You must assess all employees—even part-time and casual—for auto-enrolment. If they:

• Earn over £192/week

• Are aged 22 to State Pension age

Then you must:

• Enrol them in a workplace pension

• Handle opt-ins and opt-outs

• Submit contributions every month

6. Use a Payroll Service Built for Hospitality

A good provider will:

• Handle hourly pay

• Process shifts and variable patterns

• Manage tips/tronc

• Submit RTI filings

• Provide accurate, timely payslips

• Deal with pension and HMRC obligations

Why Hospitality Businesses Use WorldWage

• Weekly or monthly pay runs

• Support for hourly pay, tips, and troncs

• No setup fees

• Full HMRC and pension compliance

• Fast support from a UK-based team

Get a quote for hospitality payroll