CIS is deducted from labour only — never materials or VAT. The deduction is an advance payment toward your tax and National Insurance, reconciled in your Self Assessment. Not tax advice.
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This calculator works out the Construction Industry Scheme (CIS) deduction on a subcontractor's invoice and the amount actually paid across. Enter the labour charge, any materials, the CIS status and any VAT, and it shows the deduction and the net payment.
It is for both sides of a CIS payment: contractors working out what to deduct and pay over to HMRC, and subcontractors checking that the money landing in their account is right. The key rule it applies is that CIS is deducted from labour only — never from materials or VAT.
The deduction is 20% for subcontractors registered with HMRC, 30% for those who are not verified or registered, and 0% for those with gross payment status. It is not a final tax — it is an advance toward the subcontractor's Income Tax and National Insurance, settled through Self Assessment.
CIS deduction = labour × rate (0%, 20% or 30%); Net paid = (labour + materials + VAT) − CIS deduction
The CIS deduction is taken from the labour element of the invoice only, at the rate set by the subcontractor's status. Materials and VAT are never subject to the deduction. The net payment is the full invoice total, including materials and VAT, minus the CIS deducted from labour.
Type the labour element of the invoice, net of VAT. This is the only part CIS is calculated on, so keep it separate from materials.
Enter the net cost of materials on the invoice. CIS is never deducted from materials, so this amount is paid across in full — but it must be a genuine materials cost, not disguised labour.
Select 20% for a registered and verified subcontractor, 30% for one who is not registered or cannot be verified, or 0% for gross payment status. If you are the contractor, this comes from HMRC's verification.
The calculator shows the invoice total including VAT, the CIS deducted from the labour, and the net amount the subcontractor is actually paid.
CIS is deducted from labour only. Materials, plant hire and VAT are excluded, so splitting labour and materials correctly on the invoice matters — overstating materials to reduce the deduction is exactly what HMRC checks for. The materials figure should reflect real cost, not a padded number.
The deduction is not a tax bill, it is a payment on account. HMRC holds it against the subcontractor's eventual Income Tax and National Insurance for the year, which is reconciled through Self Assessment. Many subcontractors are due a refund once their allowable expenses are taken into account, because 20% of turnover is often more than their final tax liability.
Rates depend on registration: 30% applies where a subcontractor is not registered or cannot be verified, 20% where they are registered, and 0% for gross payment status granted by HMRC. This tool is a guide, not tax advice — verify status with HMRC and keep proper CIS statements for every payment.
CIS is deducted from labour only — never materials or VAT. The deduction is an advance payment toward your tax and National Insurance, reconciled in your Self Assessment. Not tax advice.
CIS is a percentage of the labour element of a subcontractor's invoice — 20% if they are registered, 30% if they are not. It is never taken from materials or VAT. So on £1,200 labour plus £300 materials, a registered subcontractor has £240 deducted (20% of £1,200) and is paid £1,260 plus any VAT.
No. The Construction Industry Scheme deduction applies to labour only. Genuine material costs, plant hire and VAT are paid in full. This is why invoices should show labour and materials separately — but the materials figure must reflect real cost, as inflating it to dodge the deduction is a common trigger for HMRC enquiries.
20% is the standard rate for subcontractors who are registered with HMRC under CIS and can be verified. 30% is the higher rate applied when a subcontractor is not registered, or the contractor cannot verify them. Registering with HMRC to drop from 30% to 20% improves cashflow considerably.
Often, yes. CIS deductions are advance payments toward your Income Tax and National Insurance, not a final tax. When you complete your Self Assessment and claim your allowable business expenses, your actual tax bill is frequently lower than the CIS already taken, and HMRC refunds the difference. Keep every CIS payment and deduction statement to claim it.