" ...and we are just a small relatively new buissness/cafe"
As @Harassedevictee said, this is a very specialised area that most people outside of the food and beverage industry won't have come across.
She provided some very good links for you to follow up on.
Do you currently have a written policy for the distribution of tips? If not, then you need to get one sorted out asap. This should say what percentage of each tip goes to what class of person (if you have more than one person doing a particular job, eg waiting staff, head chef, sous chef, kitchen porter, manager etc).
How much, if anything, do each of these people get from each tip? You need to have this in writing.
A new law came into effect two days ago. This is the Employment (Allocation of Tips) Act 2023.
Your written policy may say that any cash tips to waiting staff are kept by them entirely, or your policy may say that any cash tips are to be shared as part of your written policy on tipping.
The tipping policy does not mean that you have to give everyone the same share. You can give different groups of people (eg waiting staff, kitchen staff, managers etc) different shares of the tip.
You can also proportion the share of the tip on the number of hours worked, so that full time employees get a larger share than part time employees.
Some things to consider are:
- Type of role/work (e.g. front of house vs back of house)
- Basic pay (and how workers are engaged)
- Hours worked during period when tips are received
- Individual and/or team performance
- Seniority or level of responsibility
- Length of service
- Customer intention
You can also proportion the share of the tip on the number of hours worked, so that full time employees get a larger share than part time employees.
"We pay wages monthly, these tips will be paid alongside their monthly pay on their payslip right?"
You will need to pay the tips by the end of the following month. So any tips received in October must be paid by the end of November at the latest.
"Do we get to divide the tips up fairly."
Yes, in fact it is a requirement that you do so.
We have some staff who work 1-2 days a week, some 3, some 5. So we'd like it to be proportionate.
Would we instruct payroll for example : employee A to get 10% / employee B to get 25%? How does that work?? We have approx 9 staff members.
As mentioned above, you need to have a written policy that fairly decides how much each staff member receives. I don't know what your relationship is with your payroll provider but I would imagine that they have some process in place to deal with this. You would need to speak with them directly.
I would guess that you would need to inform them each month of what percentage is due to each employee, or perhaps you just need to notify them of any changes after the initial notification - it depends how your payroll provider works.