Calculate Construction Industry Scheme (CIS) deductions and net pay.
Net Pay
£1,640.00
CIS deduction: £360.00
Gross Pay
£2,000.00
Materials
£200.00
Labour Element
£1,800.00
CIS Deduction
£360.00
Annual Deductions
£4,320.00
The Construction Industry Scheme (CIS) is an HMRC initiative that governs how contractors in the construction industry handle payments to their subcontractors. Instead of paying them the full invoiced amount, contractors are required to deduct a percentage of the payment (excluding materials cost) and pay it directly to HMRC. This deduction acts as an advance payment towards the subcontractor's annual tax and National Insurance liabilities.
This system ensures that tax is collected throughout the year, reducing the risk of non-payment. For subcontractors, it is crucial to understand that these deductions are not a final tax. You must still file a Self Assessment tax return to calculate your total liability and offset the CIS deductions you have already paid. Our Self-Employed Tax Calculator can help you estimate your final bill.
Important: CIS is Not a Final Tax
The money deducted by your contractor is an advance payment, not the final amount of tax you owe. You must declare all your income on a tax return. The CIS deductions will be credited against your total tax and National Insurance bill. If you have overpaid, you can claim a refund from HMRC.
The rate of deduction depends on your registration status with HMRC. It is financially beneficial to be registered for CIS. Gross Payment Status is the most favourable, as it means contractors can pay you in full without any deductions.
20%
Standard rate for registered subcontractors
30%
Higher rate for unregistered subcontractors
0%
For subcontractors with Gross Payment Status
This calculator helps you see the immediate impact of these deductions on your payment. For a full picture of your annual earnings, use our Take-Home Pay Calculator.
How to use this Calculator Site tool
Simply enter the total gross payment from your invoice, input the cost of any materials included in that payment, and select your CIS deduction rate (20%, 30%, or 0%). The calculator will instantly show you the labour element, the amount of the CIS deduction, and the final net pay you will receive.
Managing your business tax obligations efficiently can make a significant difference to your bottom line. You may also find our Corporation Tax Calculator useful for related calculations.
For a broader view of your finances, try the Employer NI Calculator or the Take-Home Pay Calculator. All of our calculators are free to use and updated for the 2026/27 tax year where applicable. For official CIS guidance, visit GOV.UK CIS guide.
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