CIS Tax Calculator (UK)
Last updated: 12 August 2026
Work out the CIS deduction on a subcontractor payment. CIS is deducted from the labour element only — materials, plant hire and VAT are excluded — so this calculator splits the invoice properly.
How the calculation works
The Construction Industry Scheme requires contractors to deduct tax from subcontractor payments and pay it to HMRC on the subcontractor behalf. The deduction is 20% for registered subcontractors, 30% for unregistered, and 0% for those with gross payment status.
Crucially, CIS applies to the labour element only. The cost of materials you supplied, plant hire and VAT are all excluded from the calculation. The deducted amount is not lost — it counts as an advance payment towards your tax and National Insurance, offset when you file your return.
CIS deduction rates
| Status | Rate on labour | Who |
|---|---|---|
| Registered | 20% | Subcontractors registered with HMRC for CIS |
| Unregistered | 30% | Not registered, or details do not match HMRC records |
| Gross payment status | 0% | Larger subcontractors meeting HMRC turnover and compliance tests |
The VAT domestic reverse charge
Since March 2021, most CIS-registered construction services between VAT-registered businesses fall under the domestic reverse charge: the subcontractor does not charge VAT, and the contractor accounts for it instead. Your invoice should state that the reverse charge applies and show the VAT rate that would have been charged. It does not apply to end users, such as a homeowner or a landlord having their own property worked on.
Frequently asked questions
How much is CIS tax deducted at?
20% for subcontractors registered with HMRC under the Construction Industry Scheme, and 30% for those who are not registered or whose details do not match HMRC records. Subcontractors with gross payment status have nothing deducted.
Is CIS deducted from materials?
No. CIS is deducted from the labour element only. The cost of materials the subcontractor supplied, plant hire and VAT are all excluded, which is why invoices should show labour and materials separately.
Do I get CIS deductions back?
Yes. CIS deductions are advance payments towards your Income Tax and National Insurance. When you file your Self Assessment return, they are offset against what you owe, and any excess is refunded. Limited companies reclaim through their payroll scheme instead.
What is the VAT reverse charge for construction?
For most CIS-registered construction services supplied between VAT-registered businesses, the subcontractor no longer charges VAT — the contractor accounts for it. The invoice must state that the domestic reverse charge applies. It does not apply where the customer is an end user, such as a homeowner.
How do I register for CIS?
Register with HMRC as a subcontractor before your first payment — the difference between 20% and 30% is significant. Registration is free and can be done online with your Unique Taxpayer Reference and National Insurance number.
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This calculator is a guide, not tax advice. CIS rates and VAT rules change — check current guidance on gov.uk and speak to an accountant about your circumstances.