Free CIS Tax Calculator
Work out the CIS deduction to withhold from a subcontractor's invoice and the net amount to pay, deducting only from labour, not materials.
CIS Tax Calculator results
Fill in the details and select Calculate to see your figures.
Under the Construction Industry Scheme, a contractor deducts tax from a subcontractor's labour and pays it to HMRC. The deduction is 20% for registered subcontractors, 30% for unverified ones, and 0% for those with gross payment status, and it applies to the labour element only, not materials or VAT. Enter the labour and materials on the invoice to see the deduction and the net payment.
How to use the CIS Tax Calculator
- Enter the labour element of the subcontractor's invoice (before VAT).
- Enter the materials the subcontractor paid for directly; these are excluded from the deduction (keep receipts as evidence).
- Choose the subcontractor's CIS status: registered and verified (20%), unregistered or unverified (30%), or gross payment status (0%).
- The deduction is calculated on the labour only. Pay the subcontractor the net figure and pay the deduction to HMRC with your monthly CIS return.
How the CIS Tax Calculator works
CIS deductions come off the labour, never the materials or VAT. Strip the excluded items out first, then apply the rate to what's left.
- Labour £2,000 + materials £500 = £2,500 gross invoice.
- Materials £500 are excluded → amount subject to deduction = £2,000.
- Registered subbie at 20% → deduction = 20% × £2,000 = £400.
- Net paid to subcontractor = £2,500 − £400 = £2,100; you pay £400 to HMRC.
Excluded from the deduction: materials the subbie paid for, VAT, plant hire, consumables, and fuel used on site (but NOT travel fuel or travel/subsistence, which stay in the deduction base). Verify every subcontractor with HMRC before the first payment; unverified means the 30% rate.
Typical UK benchmarks
- Registered subcontractor rate
- 20% deduction (GOV.UK: Construction Industry Scheme — what you must do as a contractor; HMRC CIS340, updated 2024)
- Unregistered / unverified rate
- 30% deduction (GOV.UK: Construction Industry Scheme — what you must do as a contractor; HMRC CIS340, updated 2024)
- Gross payment status
- 0%, paid gross (GOV.UK: Construction Industry Scheme — what you must do as a contractor; HMRC CIS340, updated 2024)
See it in your business.
Frequently asked questions
How much CIS tax do I deduct from a subcontractor?
20% for subcontractors registered with HMRC and verified, 30% for those who are unregistered or you can't verify, and 0% for subcontractors with gross payment status. The rate applies only to the labour on the invoice; materials, VAT and plant hire are excluded.
Is CIS deducted from materials?
No. The deduction is on the labour element only. Materials the subcontractor paid for are excluded, along with VAT, plant hire, consumable stores and the cost of manufacturing or prefabricating materials. You can ask the subcontractor for receipts as evidence of the materials cost.
What about travel and fuel? Are they excluded?
This is a common mistake: fuel used on site is excluded, but fuel for travelling and travel or subsistence expenses are NOT excluded; they stay in the amount subject to the CIS deduction. Only materials, VAT, plant hire, consumables and manufacturing costs come out before you apply the rate.
Why would a subcontractor be deducted 30%?
The 30% higher rate applies when a subcontractor isn't registered for CIS, or when you can't verify them with HMRC (for example the details don't match). Registering and being verified drops the rate to 20%, so it's worth the subcontractor sorting out before the first payment.
What is gross payment status?
Subcontractors who meet HMRC's turnover and compliance tests can apply for gross payment status, which means the contractor pays them in full with no CIS deduction; they settle their own tax through Self Assessment or Corporation Tax instead. For them the deduction is 0%.
Does Tradehand work out CIS for me?
No. Tradehand does not calculate CIS deductions or file returns, and you should use your accountant or your accounting software for that. What Tradehand does is keep the labour and materials split on every job as it quotes and invoices, which is the part that is fiddly by hand, so the figures behind each payment are already separated when you or your accountant work out the deduction.
