Tips and service charges in an Irish café: what the 2022 law requires

The Payment of Wages (Amendment) (Tips and Gratuities) Act 2022 came into effect on 1 December 2022, according to Citizens Information. Three rules matter to a café. Tips paid by card or another electronic mode must be distributed fairly to employees, and the employer may not keep a share except in the cases the Act allows. The employer must display a tips and gratuities notice that says how tips are handled, including cash tips. And a charge described as a "service charge", or a similar term, must be treated as if it were an electronic tip. The Workplace Relations Commission (WRC) handles complaints from staff.

What does the law say about tips in an Irish café?

The Act, Number 23 of 2022 in the Irish Statute Book, inserted new sections 4A to 4F into the Payment of Wages Act 1991. The WRC says the Act, from 1 December 2022, "introduced new rules as to how employers have to share tips, gratuities and service charges amongst employees."

The WRC lists the service areas the rules apply to. The first is "the sale of beverages (including intoxicating liquor) or food for consumption on the premises at which such beverage or food is sold". The second is "the sale of beverages (including intoxicating liquor) or food by means of casual trading". Which of those fits your café is for you and your adviser to check. Citizens Information also names restaurants and pubs among the employees covered.

The Act defines a tip or gratuity as a payment "voluntarily made to, or left for, an employee or group of employees by a customer", where a reasonable person would infer the customer meant it to be kept by the employee or shared with other employees. It also adds "any payment by way of tips or gratuities" to the definition of wages. Our article on the minimum wage for café staff notes that tips are not counted towards the minimum wage.

Do card tips have to go to staff?

Yes. Section 4B(1) of the Act says an employer to which it applies "shall, in a manner that is fair in the circumstances and in accordance with this Act, distribute to his or her employees any tips or gratuities received by the employer by an electronic mode of payment."

The WRC says an electronic tip is "a payment other than by cash", with examples such as debit or credit card, smart card, and payment or push notification apps. Under section 4B(2), the employer "shall not retain any share" of those tips, with two exceptions in 4B(3): where the Act requires or permits it, or where the employer "regularly performs, to a substantial degree, the same work performed by some or all of the employees" and keeps no more than a fair and reasonable amount for that work.

Section 4C bars deductions from tips apart from those required by law, or "to the extent as is fair and reasonable in order to meet costs directly arising from paying tips or gratuities by means of electronic modes of payment". The WRC gives tax and bank charges as examples. Citizens Information says the Act "made it illegal for employers to use tips or gratuities to make up basic wages".

Section 4B(5) requires a written statement within 10 days of a distribution. It must show the total tips distributed for the period and the amount paid to that employee. Section 4B(7) says the employer must consult employees before setting or materially changing its policy. The WRC adds that employee consent is not required and that it is for the employer to decide the policy.

What about cash tips?

The Act's distribution rule covers electronic tips only. The WRC says that apart from the notice, "there will be no other regulation of 'cash tips'." Citizens Information says cash tips "are usually paid directly to the worker" and that where employees manage tips themselves, for example under a tronc system, the distribution rules do not apply.

The notice still has to deal with cash. Regulation 4(c)(ii) of S.I. No. 545/2022 says the notice must contain "a statement of the employer's policy on tips or gratuities made to, or left for, employees in a form other than an electronic mode of payment."

What must the tips notice say, and where must it be shown?

Section 4E(1) says the notice must state "whether or not tips or gratuities are distributed to and amongst employees", the manner and amounts if they are, and whether mandatory charges, or any portion of them, are distributed and how. Under S.I. No. 545/2022, regulation 4(c), it must also say that the Act requires the employer to distribute electronic tips to employees, and give the policy on non-electronic tips.

On location, regulation 4(a)(i) says that where the employer provides a relevant service on a premises, the notice goes "at the premises, or part of the premises, on which the relevant service is provided" and "in at least one additional location" where consumers may pay in person for the service. Regulation 4(a)(iii) adds each "online digital platform" the employer uses "in connection with a relevant service". Regulation 3 defines an online digital platform as "a website or a digital mobile application". Regulation 4(b) says the notice must be in a position, form and manner "capable of being easily read by consumers".

In our view, if your café takes orders or payments online, it is worth checking your own website or ordering page against the regulation's line on each "online digital platform". Citizens Information gives the notice fine as €500 for not displaying it, and says the WRC has a sample notice in Appendix 1 of its information guide.

Can a café add a service charge?

Yes, but if you call it a service charge it is treated as a tip. Section 4D(1) applies where an employer "describes a charge (including a mandatory charge) imposed on a customer as a 'service charge', or any similar or cognate term", or "in any other way leads customers to believe that a mandatory charge shall be distributed to employees". The employer must then treat all payments from that charge "as if any such payment was a tip or gratuity received by an electronic mode of payment". That means fair distribution to staff, whether the customer paid by card or cash.

Citizens Information puts it this way: "mandatory service charges can only be added to a bill if the money goes to employees." The trigger in the Act is the label, or leading customers to believe the money goes to staff. It does not say that every charge of any kind must go to staff. Citizens Information gives examples of mandatory charges as a cover charge, table charge or corkage. Under section 4D(2) a breach is an offence, and Citizens Information lists an on-the-spot fine of €750 for not treating a service charge as a tip.

Can owners share in the tips?

Only in the cases the Act sets out. Apart from retention the Act itself requires or permits, section 4B(3)(b) lets an employer keep a share of electronic tips where the employer "regularly performs, to a substantial degree, the same work performed by some or all of the employees", and the share is no more than "an amount that is fair and reasonable in the circumstances having regard to the amount of such work so performed by that employer." The WRC describes the same exception. Otherwise, section 4B(2) says the employer shall not retain any share. The sources I read do not say more about how that applies to a particular owner, so ask the WRC or an adviser.

What can staff do if tips are withheld?

Citizens Information says staff should speak with the employer first, and if that fails they can complain to the WRC using the online form "within 6 months of the dispute or complaint occurring". It says that limit may be extended by a further 6 months only where there is a reasonable cause that prevented the complaint.

The WRC says an employee can complain under the Payment of Wages Act about unlawful deductions from tips, about a failure to distribute electronic tips fairly, and about unlawful retention of a share. A complaint about the core terms of employment needs one month's continuous service, and compensation there is capped at four weeks' remuneration. The WRC also says the employer's tips policy must be in the core terms given within 5 days of starting. Citizens Information says the WRC can order an employer to reimburse unlawful deductions.

Sources

• Citizens Information, Tips, gratuities and service charges, page edited 2 January 2024, read 12 October 2026.
• Workplace Relations Commission, Tips and Gratuities, read 12 October 2026.
• Irish Statute Book, Payment of Wages (Amendment) (Tips and Gratuities) Act 2022 (No. 23 of 2022), read 12 October 2026.
• Irish Statute Book, S.I. No. 545/2022, Payment of Wages Act 1991 (Display of Notices) Regulations 2022, read 12 October 2026.

This is a summary of public guidance and the Act, read 12 October 2026, not legal advice. The WRC and your adviser have the final word. Cupán Studio builds websites for cafés in Ireland.