CIS Deduction Calculator
Calculate the correct CIS deduction to withhold from a subcontractor payment. Handles registered (20%) and unregistered (30%) rates, and correctly separates materials from the labour element before applying the deduction.
Frequently asked questions
What is CIS and who does it apply to?
The Construction Industry Scheme (CIS) is an HMRC scheme that requires contractors to deduct money from subcontractors' payments and pass it to HMRC. It applies to contractors who pay subcontractors for construction work in the UK. Both contractors (who deduct) and subcontractors (who receive reduced payment) need to register.
What is the CIS deduction rate?
The CIS deduction rate depends on the subcontractor's registration status: 20% for registered subcontractors who have been verified by HMRC; 30% for unregistered subcontractors; and 0% for subcontractors who have been granted gross payment status by HMRC. The deduction is calculated on the labour element only — not on the cost of materials.
Do CIS deductions apply to materials?
No. CIS deductions only apply to the labour element of a payment. If a subcontractor's invoice includes materials, you should deduct the cost of materials first and only apply the CIS rate to the remaining labour amount. Always ask your subcontractor to itemise materials separately on their invoice.
What do I do with the CIS deduction?
As the contractor, you must pay the deducted amount to HMRC each month as part of your CIS monthly return. You must give the subcontractor a payment and deduction statement showing the gross amount, the cost of materials, and the amount deducted.
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