CIS Deduction Calculator.
Labour, materials, deduction rate — what to withhold and what to pay your subcontractor.
Deductions apply to the labour element only — verified materials at cost are paid in full. Always verify the subcontractor with HMRC before the first payment; the rate comes from the verification, not from this page. Everything runs in your browser — your figures never leave it. Estimates are general information, not advice: ask us about your own position.
Construction, by the book
What to hold back, what to hand over.
The Construction Industry Scheme makes every contractor a small tax collector: before paying a subcontractor, you deduct tax from the labour element and send it to HMRC. The rate depends on the subcontractor's status — 20% if they are registered, 30% if they are not, 0% if they hold gross payment status — and the deduction never touches materials, plant hire or VAT. This calculator splits a payment into its parts and gives you both figures: what HMRC gets, and what your subcontractor takes home.
The two mistakes that generate penalties: paying before verifying — you must verify each new subcontractor with HMRC, and the verification result tells you which rate to apply — and deducting from the whole invoice, materials included, which overtaxes the subcontractor and creates reconciliation misery at year end. Materials must be genuine and evidenced, at cost, not a round number invented to shrink the deduction.
Then the rhythm: CIS returns are due by the 19th of every month, nil returns included, with automatic penalties for missing them. Between verification, monthly returns, deduction statements for each subcontractor, and offsetting deductions suffered against your own liabilities, CIS is one of the most administratively dense corners of UK tax — and running it for contractors is bread-and-butter work for us.
Common questions.
Is CIS deducted from materials?
No. Deductions apply only to the labour element of a payment. The cost of materials, plant hire and VAT are excluded — but the materials figure must be genuine, evidenced and at cost. Deducting from the full invoice including materials is the most common contractor error, and inflating materials to shrink deductions is the most common subcontractor one.
When is the 30% rate used instead of 20%?
When HMRC cannot match the subcontractor — usually because they are not CIS-registered, or the details you verified do not match their records. Verification tells you the rate to apply. If you are a subcontractor suffering 30%, registering properly fixes it going forward.
What is gross payment status?
Approval for a subcontractor to be paid with no deduction at all — they settle their own tax through their return. It requires a compliance test (filing and paying on time) and a turnover test, and HMRC reviews it annually. For established subcontractors it transforms cash flow, and losing it through late filings is an expensive own goal.
When are CIS returns and payments due?
Returns by the 19th of each month for the tax month just ended, including nil returns. The deductions themselves are paid over with your PAYE by the 22nd (electronic). Miss the return deadline and penalties start at £100 and escalate automatically — this is a fixture of our clients' tax calendars for a reason.
Keep going.
CIS, run for you
Verification, monthly returns, deduction statements — the whole scheme, handled.
Open →My Tax Calendar
The 19th, every month, on your phone before it is upon you.
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Taking someone on properly instead? Employees follow different rules — start here.
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Contractor or subcontractor, CIS rewards being boringly correct every month — that is a service we sell, and it is cheaper than the penalties.