Tips and Gratuities Act: a practical guide for Irish hair salon owners

"Would you like to add a tip?" The card terminal asks it so often now that card gratuities have quietly become the norm in Irish salons, and most owners have never read the law that governs what happens to that money next. Since 1 December 2022, the Payment of Wages (Amendment) (Tips and Gratuities) Act 2022 makes card tips legally your team's money, requires a displayed tips notice in your salon and on your website, and gives every stylist a route to the Workplace Relations Commission if the split feels unfair. Hairdressing is not caught by accident: it is one of the sectors the legislation explicitly lists.

This guide goes through the Act as it applies to a hair salon in the Republic of Ireland: what the notice must say and where it must hang, how to split card tips defensibly, the written statement you owe your team within 10 days, how cash and card are treated differently, where chair renters fit, and what a WRC inspector actually checks. Every legal point below was verified on the Act itself, the WRC's official information guide or citizensinformation.ie in October 2026. One disclosure before we start: this blog is published by ViteUneCoupe, a free salon booking system with 0% commission. Tips never pass through booking software, ours included, but the same card terminal serves both, so the subjects meet at your reception desk. And to be clear on scope: this is a guide, not legal advice; for a dispute, talk to the WRC or a solicitor.

Does the tips law apply to your salon? Yes, by name

The Act works through regulations that list the services it covers, and the list leaves no room for doubt. The WRC's information guide to the Act includes "carrying out non-surgical cosmetic procedures including the following: cosmetic nail care; nail styling; skin care; hair care; hair styling; tattoo services; and piercing services" among the prescribed service areas, and the display regulations name "hairdressers" alongside restaurants, pubs and hotels when setting out where the notice must hang. If you employ even one stylist or a Saturday junior, the Act applies to you.

In outline, the Payment of Wages (Amendment) (Tips and Gratuities) Act 2022 does five things:

• Card and other electronic tips must be distributed to employees in a manner that is fair in the circumstances. They are not business income.
• Tips sit outside contractual wages. You cannot use tips to make up basic pay, and you cannot deduct from wages because tips were good.
• Anything presented as a service charge must go to staff as if it were an electronic tip.
• You must display a tips and gratuities notice stating how cash tips, card tips and any mandatory charges are handled.
• You must give employees a written statement of tips distributed, and they can bring complaints to the WRC.

The Act amended three existing laws (the Payment of Wages Act 1991, the Terms of Employment (Information) Act 1994 and the Workplace Relations Act 2015), which matters in practice because it plugged tips into machinery that already existed: core terms statements, WRC inspections and WRC adjudication.

The tips and gratuities notice: what it must say and where it must hang

This is the obligation a walk-in inspector can check in thirty seconds, and failing it is a criminal offence. Per the WRC guide, the notice must state:

• whether tips or gratuities are distributed to or amongst employees,
• where they are distributed: the way they are distributed and the amounts so distributed,
• whether mandatory charges, or any portion of them, are distributed to employees, and if so how and how much.

For fixed premises such as hairdressers, the display regulations require the notice:

• at the premises, and in at least one location where clients can pay in person (for a salon, the reception desk is the obvious spot), and
• on each website, mobile application and other online digital platform you use in connection with the service.

That second point is the one salons miss. If clients book through your website or an online booking page, your tips notice belongs there too, not just laminated at the till. A short "tips" line on your booking page or in your site footer covers it.

The WRC's downloadable information guide ends with three appendices worth opening before you write anything: appendix 1 is a sample notice skeleton (sections for cash, electronic tips, how tips are distributed, service charges and mandatory charges), appendix 2 gives example wordings, including the simplest honest option, along the lines of "we do not add a service charge; 100% of all tips received are fully distributed to staff", and appendix 3 gives sample core terms text for new hires. An employer who contravenes the display obligations is guilty of an offence and liable on summary conviction to a Class C fine, currently up to €2,500.

One more notice to know about exists for businesses that engage contract workers rather than employees: a separate contract workers tips and gratuities notice, displayed on each online platform used for the service. Most salons will never need it, but it becomes relevant in the chair renter section below.

Splitting card tips fairly: the seven factors the WRC will use

The Act deliberately does not prescribe a formula. You choose the policy, after consulting your team; their consent is not required, but the consultation is, both when you introduce the policy and before any material change. If an employee later challenges the split, a WRC adjudication officer must consider all relevant factors, and the Act lists these:

1. seniority or experience of the employee,
2. the value of sales, income or revenue generated for the business by the employee,
3. the proportion or number of hours worked during the pay period in which the tip was made,
4. whether the employee is full-time or part-time,
5. the role and influence of the employee in providing service to customers,
6. whether the employee was consulted on the manner of distribution, and
7. whether there is an agreement, formal or informal, on how tips are distributed.

Notice what that list rewards: a written policy your team was consulted on, tied to observable facts such as hours and takings. In a salon, two models map naturally onto it:

• Direct attribution: the tip a client adds after their appointment goes to the stylist who did the hair, with an agreed share to the junior who washed, mixed and swept. Defensible under factors 2 and 5, and the fairest fit for how salon tipping actually works, since clients tip a person.
• Pooling by hours: all card tips for the week go into one pot, split by hours worked. Defensible under factor 3, simpler to administer, kinder to juniors and part-timers, but your seniors may feel it ignores factors 1 and 2. If you pool, say so plainly in the notice and in the consultation.

Either model is lawful. An unwritten "whatever is in the drawer on Friday" is the model that loses at adjudication.

A worked example, entirely hypothetical

A four-person salon takes €280 in card tips in a week. The team: two senior stylists (39 hours each), one part-time stylist (20 hours) and one junior (39 hours).

Under direct attribution, suppose the terminal records €120 of tips on appointments taken by senior A, €90 by senior B and €70 by the part-timer, and the written policy says each stylist passes 10% of their tips to the junior. Senior A receives €108, senior B €81, the part-timer €63, and the junior €28. Every number traces back to a recorded appointment, which is exactly the evidence trail the WRC likes.

Under pooling by hours, the pot of €280 is divided by the 137 hours worked, about €2.04 per hour: roughly €80 each for the three people on 39 hours and €41 for the part-timer.

Both splits are "fair in the circumstances" if that is what the displayed, consulted policy says. The unlawful versions are the ones the Act was written to kill: the owner quietly keeping the card tips, or counting them towards wages.

The 10 day written statement

Every time you distribute electronic tips, you must give each employee a written statement no later than 10 days after the distribution, showing:

• the total amount of tips or gratuities and service charges distributed by the salon for the period, and
• the amount distributed to that particular employee.

Two practical mercies in the rules: the obligation only covers electronic tips, so the card terminal's own records do most of the work, and an honest error in a statement is not prosecutable, only a deliberate misstatement is. A one-line addition to the payslip run, or a simple weekly sheet, satisfies it. What does not satisfy it is nothing, which is what most non-compliant salons currently produce.

The tips policy also feeds into hiring paperwork: your policy on tips and mandatory charges is part of the core terms a new employee must receive within 5 days of starting. If your day-5 statements predate December 2022 and have never been updated, they are missing a required term.

What you may lawfully keep from card tips

Almost nothing, and the exceptions are precise. You cannot retain any share of electronically received tips except:

• amounts required by law: the income tax, PRSI and USC due on tips you distribute through payroll,
• the direct costs of distribution: bank or card processing charges attributable to the tipping, and
• a fair share for yourself where you regularly perform the same work as the team, in proportion to the work you actually do.

That last exception describes most salon owners in Ireland, who are behind a chair more days than not. If you cut and colour alongside your staff, you may take a fair share of the pooled tips for that work. What you may not do is take a share for being the owner. If you retain a processing percentage, the WRC's own example wording shows how to disclose it: "if you choose to leave a tip through a card, we will retain [x] per cent to cover the charges we incur in processing your payment; the remainder is distributed to staff." What those terminal charges actually run to, provider by provider, is the subject of our guide to card payment processing for Irish hair salons.

On tax: the Act changed nothing about tax treatment. All tips, cash or card, are chargeable to income tax under Schedule E of the Taxes Consolidation Act 1997. Tips you distribute through payroll go through PAYE like wages; cash tips a client hands directly to a stylist are the stylist's own responsibility to declare to Revenue. The full treatment is set out in the WRC's information guide PDF and on Citizens Information's tips and gratuities page.

Cash tips versus card tips

The Act treats them completely differently, for one practical reason: cash handed to a stylist never comes under your control, so there is nothing for the law to make you distribute.

So cash is lighter on paperwork but not invisible: your notice must still say how cash tips are handled, even if the answer is simply "cash tips are kept by the stylist who receives them, or pooled as the team decides among themselves". Card tipping keeps growing, the evidence trail it creates is precisely what the WRC uses on a complaint, and a salon that quietly discourages card tips to avoid the admin is swimming against both the law's intent and clients' habits.

Service charges: do not use the words unless the money goes to staff

A charge called a "service charge", or anything that would lead a client to believe it is a charge for service, must be distributed to staff as if it were an electronic tip, in its entirety. Hair salons rarely add service charges the way restaurants do, but the rule still bites in two salon-shaped ways:

• If you add a mandatory charge of any kind (some salons experimented with small card or admin fees), your notice must say what it is for, how it is treated and whether any of it reaches employees. Do not label it anything service-flavoured unless staff receive it.
• A voluntary "service" line on the terminal screen is simply a tip, with all the card tip rules above.

Separately from the tips law, how you display your prices is consumer law territory with its own rules; the tips notice does not replace your price list.

Chair renters and the tips law

The Act protects employees, and separately contract workers engaged by a business. A genuine chair renter is neither: they are an independent business renting space from you, taking their own payments, setting their own prices. Tips their clients give them, by cash or through the renter's own card reader, are simply the renter's business income to declare, and your tips notice does not govern them.

The grey zone appears when the renter's payments run through your terminal. If your till collects a card tip left for a renter, you are holding money the client plainly intended for a specific person, and the safest practice mirrors the Act even where its employee provisions do not strictly apply: pass it on in full, promptly, and keep a record. The Act's contract worker provisions, which require platform-style businesses to display a notice on how contract workers' tips are treated, show the direction the law points. Better still, structure the rental so renters take their own payments, which also keeps the boundary between employment and rental clean. That boundary, and why Revenue and the WRC police it, is the subject of our guide to renting a chair in an Irish hair salon.

One related distinction worth keeping sharp, because clients and even some owners blur it: a booking platform's commission on an appointment is not a gratuity and has nothing to do with this law. A marketplace fee comes out of your service price before anyone is tipped; a tip is your team's money on top. We compare those models in direct bookings versus marketplaces for Irish salons.

What a WRC inspection looks for

The Act gave WRC inspectors explicit powers, under section 27 of the Workplace Relations Act 2015, to inspect premises for compliance with the tips rules. Inspections are usually unannounced and bundled with the general employment rights checklist. On tips specifically, expect an inspector to look for:

• the displayed notice, at the premises and at the point of payment, and whether your website or booking page carries the policy,
• day-5 core terms statements that include the tips policy,
• the 10 day statements of tips distributed, against the card terminal's records,
• payroll treatment: that tips are not making up contractual wages and that deductions from tips are only the lawful ones.

The WRC says plainly that its first objective is voluntary compliance rather than prosecution, but the backstop is real: the display offence carries a Class C fine of up to €2,500. On the complaints side, an employee with at least one month's service can refer a core terms complaint, any employee can complain about unfair distribution or unlawful retention under the Payment of Wages Act, complaints must be brought within 6 months of the breach, and a core terms award can reach four weeks' remuneration. Tips sit inside your wider pay obligations, payslips and minimum wage included; for the full pay picture, see our guide to hairdresser wages in Ireland.

A tips policy that passes inspection: the checklist

Everything above compresses into an afternoon's work:

1. Decide the model with your team in the room: direct attribution with a junior's share, or pooling by hours. Minute the consultation, even informally by email.
2. Write the policy using the WRC guide's appendix 1 skeleton: cash, card, how distributed, service charges, any processing retention, your own share if you work the floor.
3. Display it: reception desk, plus a tips line on your website and booking page.
4. Update the day-5 core terms template for new hires, and give existing staff the policy in writing.
5. Set up the 10 day statement as part of the payroll or weekly cash-up routine: total tips for the period, each person's share.
6. Keep the terminal records. They are both your distribution evidence and your statement source.
7. Diary a yearly review, and consult the team before any material change.

Where your booking setup touches your tips

Honestly: booking software does not handle tips, and ViteUneCoupe is no exception. We process no payments, so no tip ever passes through us, and nothing we do replaces the notice, the statements or your payroll. The connection is one step earlier. The Act's fairest distribution factors, who generated the revenue and who worked the hours, are only usable if you can see them, and a booking calendar that records which stylist took which appointment gives you that record for free. ViteUneCoupe's free plan does exactly that: each stylist has their own services, hours and calendar, with unlimited online bookings and 0% commission, permanently, so the money clients add on top as a tip is never mirrored by money a platform takes off the top as a fee. The Standard plan, from 29 € ex-VAT per month with no commitment, adds confirmation, reminder and thank-you emails (email only, no SMS) and calendar sync. And since your booking page counts as an online platform you use in connection with the service, it is also one of the places your tips notice belongs.

Frequently asked questions

Do I have to pass card tips on to my staff in Ireland?

Yes. Since 1 December 2022, tips received electronically, by card, smart card or tipping app, must be distributed to employees in a manner that is fair in the circumstances. You may only retain the tax due on distributed tips, the direct costs of processing them, and a fair share for yourself if you regularly do the same work as your team. Keeping card tips as business income is unlawful and complaints go to the WRC.

What must the tips and gratuities notice in my salon say?

Whether and how tips are distributed to employees, the way and amounts distributed, and how any mandatory charges are treated, covering both cash and card tips. It must be displayed at the premises, in at least one place where clients pay, and on each website or online platform you use for the business, your booking page included. Not displaying it is an offence with a Class C fine of up to €2,500. The WRC's information guide includes a sample notice in its appendix.

Can I keep a share of the tips as the salon owner?

Only in two cases: to cover the direct costs of distributing electronic tips, such as card processing charges, disclosed in your notice; or where you regularly perform the same work as your employees, in which case you may take a share that is fair relative to the work you actually do behind the chair. A share for simply owning the salon is not permitted.

Are cash tips covered by the Tips and Gratuities Act?

Only lightly. Cash handed directly to a stylist never comes under your control, so there is no distribution duty and no written statement requirement. Your displayed notice must still state how cash tips are handled, and the stylist is responsible for declaring cash tips to Revenue. All tips, cash or card, are taxable under Schedule E.

What statement of tips do I have to give my employees?

Within 10 days of each distribution of electronic tips, a written statement showing the total tips and service charges distributed for the period and the amount paid to that employee. An honest error is not an offence, only a deliberate misstatement. Card terminal records make this straightforward to produce weekly or with each payroll run.

Do tips count towards the minimum wage?

No. The Act places tips outside contractual wages: basic pay must reach the minimum wage on its own, in every pay reference period, before any tips. Building a pay packet as "wages plus tips to reach the minimum" is unlawful, and so is deducting from wages because tips were good.