Calculate Your CIS Deduction — Free CIS Calculator for UK Subcontractors

How CIS Deductions Work

Under the Construction Industry Scheme (CIS), contractors must deduct tax from payments to subcontractors and pass it to HMRC. The deduction rate depends on the subcontractor's registration status: 20% for registered subcontractors, 30% for unregistered, and 0% for those with gross payment status.

Deductions apply only to the labour element of a payment. Materials the subcontractor paid for directly, VAT, plant hire, and consumables are subtracted before the CIS percentage is applied. This is why separating materials from labour on every invoice matters — if the contractor deducts CIS from the full amount including materials, the subcontractor loses cash flow unnecessarily.

How to Interpret the Results

The net payment figure is what the subcontractor actually receives. The deduction amount goes to HMRC as an advance payment against the subcontractor's tax and National Insurance bill — it's not an extra tax. Subcontractors claim these deductions back when they file their Self Assessment or Corporation Tax return.

If the deduction seems high, check whether the subcontractor is registered for CIS. Moving from 30% to 20% on £50,000 of annual labour payments saves £5,000 in cash flow. Registration is free and takes minutes.

This calculator provides estimates based on standard CIS rules. For complex situations involving the domestic reverse charge, multiple subcontractors, or gross payment status applications, consult a qualified accountant.