What does the CIS Subcontractor Tax Calculator do?

Calculate CIS deductions on subcontractor invoices at 20%, 30% or gross payment status. All calculations are performed in your browser using official UK rates and thresholds.

Is this suitable for my business?

This calculator provides general estimates based on standard UK business rates and rules. Every business is different — consult your accountant for advice specific to your circumstances.

Does this use 2025/26 tax rates?

Yes. All rates and thresholds are based on the current 2025/26 UK tax year. Corporation Tax main rate is 25% for profits over £250,000, with a 19% small profits rate.

CIS Subcontractor Tax Calculator

Calculate CIS deductions on subcontractor invoices at 20%, 30% or gross payment status.

Last updated: April 2026 · Source: GOV.UK – Construction Industry Scheme

Invoice Amount (incl. materials)

Materials Cost

CIS Deduction (20%)

£800.00

You Receive

£4,200.00

Invoice Total	£5,000.00
Materials (not deducted)	£1,000.00
Labour (subject to CIS)	£4,000.00
CIS Deduction	-£800.00
Net Payment	£4,200.00

CIS deductions are not a tax — they're advance payments towards your tax bill. Claim them back on your self-assessment return.

Disclaimer

This calculator is provided for informational purposes only and should not be considered as financial or tax advice. All calculations are performed locally in your browser — no personal data is collected or sent to our servers. Rates and thresholds are sourced from HMRC and GOV.UK and are updated for the current tax year. Always verify results with HMRC or consult a qualified professional before making financial decisions.

How It Works

Under the Construction Industry Scheme (CIS), contractors must deduct tax at source from payments made to subcontractors for construction operations. The standard deduction rate is 20% and applies to the labour element of each payment. Material costs that the subcontractor has incurred are excluded from the deduction, provided the subcontractor provides evidence such as supplier invoices. The contractor then pays the withheld amount to HMRC on behalf of the subcontractor.

Subcontractors can apply for gross payment status (0% deduction) if they meet HMRC's turnover, compliance, and business tests. Unverified subcontractors—those not registered with HMRC under CIS or whose details cannot be confirmed—face a higher 30% deduction rate. Contractors must verify each new subcontractor with HMRC before making the first payment, using the online verification service.

Contractors file monthly CIS returns by the 19th of each month, reporting all payments made to subcontractors and the deductions applied. Subcontractors offset their CIS deductions against their Self Assessment or Corporation Tax liability at the end of the year. If total CIS deductions exceed the tax owed, the subcontractor receives a refund. Accurate record-keeping of gross payment amounts, material deductions, and CIS deductions is mandatory for both parties.

CIS deduction on a £5,000 subcontractor payment

Total invoice from verified subcontractor: £5,000.
Materials element supported by receipts: £1,200.
Labour element subject to CIS: £5,000 − £1,200 = £3,800.
CIS deduction at 20%: £3,800 × 0.20 = £760.
Net payment to subcontractor: £5,000 − £760 = £4,240. The £760 is paid to HMRC.

Source: GOV.UK – Construction Industry Scheme

Frequently Asked Questions

What does the CIS Subcontractor Tax Calculator do?: Calculate CIS deductions on subcontractor invoices at 20%, 30% or gross payment status. All calculations are performed in your browser using official UK rates and thresholds.
Is this suitable for my business?: This calculator provides general estimates based on standard UK business rates and rules. Every business is different — consult your accountant for advice specific to your circumstances.
Does this use 2025/26 tax rates?: Yes. All rates and thresholds are based on the current 2025/26 UK tax year. Corporation Tax main rate is 25% for profits over £250,000, with a 19% small profits rate.