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CIS Deduction Calculator

Enter a construction invoice and the materials on it to see how much the contractor deducts under the Construction Industry Scheme (CIS), and how much the subcontractor is paid.

Your invoice

The amount for the work, not including VAT. VAT never changes the CIS deduction, and many construction invoices use the VAT reverse charge and show no VAT at all.
What the subcontractor actually paid for materials, consumables, fuel (not for travel) and hired plant on this job. If they are not VAT registered, include the VAT they paid. Enter 0 if there are none.

CIS status

The rate the contractor was given when they verified the subcontractor with HMRC.

This is an estimate. The contractor's figure can differ if they estimate the materials themselves, take a CITB levy, or round differently.

How the CIS deduction is worked out

The contractor works out the deduction in three steps, following HMRC's CIS guide for contractors and subcontractors (CIS 340).

  • Start with the payment for the work, leaving out any VAT.
  • Take off what the subcontractor actually paid for materials and the other allowable costs on this job.
  • Apply the subcontractor's CIS rate to what is left. The contractor keeps that amount back and pays it to HMRC.
Example: a £1,000.00 invoice with £300.00 of materials, at 20%
Invoice amount before VAT
£1,000.00
Materials (no deduction on this)
£300.00
Amount the deduction applies to
£700.00
CIS deduction at 20%
£140.00
Paid to the subcontractor
£860.00

CIS deduction rates

CIS deduction rates
Subcontractor statusDeduction rate
Registered for CIS20%
Not registered for CIS30%
Gross payment status0% (no deduction)

The contractor finds out which rate applies by verifying the subcontractor with HMRC before paying them. Rates last checked against GOV.UK on 11 October 2026.

What counts as allowable costs

Only costs the subcontractor paid for themselves, for this job, come off before the deduction is worked out:

  • Materials bought for this contract.
  • Consumable stores used on the job.
  • Fuel, except fuel for travelling.
  • Plant they hired for the job, and the fuel to run it. Plant they own does not count.
  • The cost of making or prefabricating materials.

Labour, travel and subsistence are all part of the amount the deduction applies to. If the subcontractor is VAT registered, costs are taken off without VAT. If they are not VAT registered, the VAT they paid on these costs comes off too.

If the contractor thinks the costs claimed are too high, or they are not shown, the contractor can make a reasonable estimate of the materials and deduct from the rest.

What happens to the money deducted

A CIS deduction is not an extra tax. It is an advance payment towards the subcontractor's own tax and National Insurance.

  • Sole traders and partners include it on their Self Assessment tax return, where it is set against the tax they actually owe for the year. If too much was deducted, the difference is repaid.
  • A limited company sets it against the PAYE and National Insurance it owes HMRC as an employer.

The contractor must give the subcontractor a statement showing each payment and deduction. Keep these, as they are your record of what has already been paid to HMRC.

What this calculator does not cover

  • CITB levy: if your contractor takes a levy from the payment, your figures may differ from this estimate.
  • VAT: the deduction is never worked out on VAT, so it is left out here. Whether VAT is charged, or the VAT reverse charge applies, does not change the deduction.
  • Whether work falls under CIS at all. Some work, such as architecture, surveying and delivering materials, is outside the scheme.

Official sources

Questions

Frequently asked questions

What is the CIS deduction rate?
It is 20% if the subcontractor is registered for CIS, 30% if they are not registered, and nothing at all if they have gross payment status.
Is CIS deducted from materials?
No. The deduction is worked out after taking off what the subcontractor actually paid for materials, consumables, fuel (not for travel) and hired plant on that job.
Is CIS deducted from VAT?
No. The deduction is worked out on the amount before VAT, so VAT never changes it.
Is a CIS deduction an extra tax?
No. It is an advance payment towards the subcontractor's own tax and National Insurance. Sole traders and partners set it against their tax bill on their Self Assessment return, and any amount deducted that they did not owe is repaid.
How do I avoid the higher 30% rate?
The 30% rate applies when HMRC cannot match the subcontractor to a CIS registration. Registering for CIS as a subcontractor means contractors deduct at 20% instead.
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Official sources

Last reviewed

Reviewed
Version 1.0.0

This calculator gives estimates for general information only. It is not financial, tax or legal advice, and it does not decide whether work falls under CIS or which costs a contractor will accept. Check GOV.UK guidance or get professional advice if you are unsure.