Pizza Express is to remove an 8% administration fee on staff tips made by card, the company has announced.
The fee will stop on October 6 and follows a campaign by unions to allow restaurant workers to keep tips left by customers.
Pizza Express said a new automated system will be introduced across its 430 restaurants, which employ 10,000 staff.
Tips made by cards will be "fully distributed" among employees, said the firm.
The firm's chief executive Richard Hodgson said: "We recognise that our team members are critical to delivering the fantastic customer experience that Pizza Express has built over many years.
"As a leader in the casual-dining industry, we're committed to best practice and to ensuring that our people are properly rewarded for the valuable contribution they make to our business.
"We have always been, and will continue to be, transparent about our tipping policies. We also agree with calls for greater clarity across the industry in order to ensure that staff are given a fair deal, and to enable customers to make an informed choice when it comes to tipping.
"We want people to recognise that this is a company that values employees and offers long-term opportunities. I'm committed to ensuring that we continue to work on improving the image of our sector, and to ensure we appeal to talented, ambitious people with the right mix of skills.
"We are playing our part by investing heavily in apprenticeships and the creation of 2,500 new jobs over the next few years and we welcome the Government's decision on the Living Wage which we will be adopting in full."
Voluntary code of practice
Business Secretary Sajid Javid has launched an investigation into tipping after leading restaurant chains were accused of keeping all or part of the service charges automatically added to bills rather than passing them on to staff.
The inquiry will look at how restaurants treat tips left by customers and whether intervention is necessary to strengthen the voluntary code of practice run by the industry.
He said earlier this week: "When a diner leaves a tip, they rightly expect it to go to staff. In full. I'm concerned about recent reports, suggesting some restaurants pocket tips for themselves. That's just not right.
"I've ordered an immediate investigation to look at the evidence and consider the views of employees, customers and the industry to see how we can deal with the abuse of tipping. We want a fair deal on pay for working people and that includes taking action on tipping abuse."
Mr Javid said: "It's good to hear that Pizza Express is making sure that 100% of tips go to staff, just days after I launched an investigation to look at this issue.
"The Government is committed to delivering fairness for everyone - including waiting staff across the country, who work hard for the tips they deserve."