CIS deduction calculator

How the deduction works

Under the Construction Industry Scheme, a contractor paying you for construction work takes a deduction from your pay and passes it to HMRC. It isn't an extra tax: it counts as an advance payment towards your own Income Tax and National Insurance for the year.

• 20% if you're registered for CIS and the contractor can verify you. Give them your exact registered name and your UTR.
• 30% if you're not registered, or they can't verify you.
• Nothing if you have gross payment status. You pay all your own tax.

The deduction is worked out on your labour only. Contractors don't deduct from what you charge for:

• VAT
• materials you paid for yourself
• plant hired for the job
• consumables, meaning equipment that's now unusable
• manufacturing or prefabricating materials

If you have no receipts for materials, the contractor estimates what they cost, so keep them.

A made-up example

A registered plasterer invoices a builder for a week's work: £1,500 labour and £400 of materials they bought.

• Invoice total before VAT: £1,500 + £400 = £1,900
• CIS deduction: 20% of the £1,500 labour = £300
• Paid to the plasterer: £1,600, and the £300 goes to HMRC towards their tax

Working back from what you were paid: if you got £1,200 for labour after a 20% deduction, the labour before it was £1,200 ÷ 0.8 = £1,500. After a 30% deduction, divide by 0.7.

Getting the deductions back

Each month the contractor must give you a statement of what they paid you and what they deducted, within 14 days of the end of the tax month. Keep every one.

• Sole traders and partners: on your Self Assessment tax return, put your total pay before deductions as income and the total deductions as "CIS deductions". HMRC takes them off what you owe. If they come to more than your tax bill, HMRC pays the difference back.
• Limited companies: the deductions are set against what the company owes through its payroll, by entering them on the Employer Payment Summary. Not through the Corporation Tax return.

Not sure what your rate should be after costs and tax? The day rate calculator works out the rate you need as a sole trader.

When CIS applies

CIS covers most construction work to buildings, including site preparation, decorating and refurbishment, when a contractor pays you: a builder, a property developer, a labour agency or gang leader, or an organisation that has spent more than £3 million on construction in 12 months. A homeowner paying for work on their own home isn't a contractor, so those jobs are invoiced as normal.

Some jobs are outside the scheme, including architecture and surveying, scaffolding hire with no labour, carpet fitting and delivering materials.

If you're VAT registered and invoice a VAT-registered contractor for CIS work, the VAT domestic reverse charge usually applies: you don't charge the VAT, the contractor accounts for it. Check GOV.UK's reverse charge guide before you invoice.

Sources: GOV.UK What you must do as a CIS subcontractor and who is covered by CIS.

Homeowner jobs in Knockround

Knockround doesn't work out CIS deductions on its invoices yet, so for work as a subcontractor, use this calculator and agree the figures with the contractor. For your own customers, Knockround keeps every job on one board from enquiry to paid, quotes go out line by line and are accepted with a tap, and every invoice has a Pay button for Apple Pay, Google Pay or card.

Try it on the jobs board demo, with made-up customers. It's free for 7 days with no card needed, then £19.99 a month.

Written by the Knockround team. CIS rules checked on GOV.UK on 29 October 2026. This is a guide, not tax advice: HMRC's CIS helpline or an accountant can tell you what applies to you.