What is the Construction Industry Scheme (CIS)?

CIS requires contractors to deduct tax at source from payments to subcontractors. Registered subcontractors have 20% deducted, unregistered have 30% deducted. Those with gross payment status receive the full amount. Deductions count as advance tax payments.

How do materials affect CIS deductions?

CIS deductions are only applied to the labour element of a payment, not materials. Materials must be listed separately on the invoice. The subcontractor must have actually purchased the materials - you cannot artificially inflate materials to reduce deductions.

How do I get gross payment status?

You must apply to HMRC and meet three tests: business test (you work in construction in the UK), turnover test (£30,000+ for sole traders, or £30,000 per partner/director), and compliance test (up-to-date tax returns and payments for the past 12 months).

Can I reclaim CIS deductions?

Yes. CIS deductions are advance payments of your income tax and NI. When you file your self-assessment tax return, CIS deductions are offset against your tax bill. If deductions exceed your tax liability, you can claim a refund from HMRC.

Does CIS apply to all construction work?

CIS covers most construction work including building, civil engineering, alterations, repairs, decorating, and demolition. It does NOT cover architecture, surveying, plant hire without an operator, or materials delivery only.

TradeCalculator

Subcontractor CIS Calculator

Calculate Construction Industry Scheme deductions and net payment

Gross Payment

Materials Cost

CIS Registration Status

How We Calculate This

Enter the gross payment amount and the cost of materials. The calculator subtracts materials from the gross payment to determine the labour element, then applies the CIS deduction rate (20% for registered, 30% for unregistered, 0% for gross payment status) to the labour element only. The result shows the CIS deduction amount and net payment the subcontractor receives.

Frequently Asked Questions

Related Calculators

Day Rate Calculator

Calculate net income from day rate after NI, income tax, pension and insurance.

Hourly Rate Calculator

Calculate hourly rate from target income, overheads, profit margin and billable hours.

Job Pricing Calculator

Calculate job price from materials, labour, waste, travel, markup and VAT.

Profit Margin vs Markup Calculator

Convert between profit margin and markup percentages with worked examples.

Mileage Cost Calculator

Calculate mileage costs at HMRC rates vs actual vehicle running costs.

Last updated: March 2026

All calculations are estimates. Verify with your supplier.