CIS Tax Calculator (Construction Industry Scheme)
Two calculators in one: (1) work out CIS deduction on any invoice, and (2) estimate your final year-end tax bill or rebate after Self Assessment. UK 2024/25 rates.
Per invoice
Year-end Self Assessment
How CIS actually works
The Construction Industry Scheme is a form of tax withholding specific to UK construction. The contractor (the person paying you) is legally required to deduct 20% or 30% from the labour portion of every invoice you send them and hand it to HMRC. You get a "payment and deduction statement" (PDS) each month showing what was taken. Keep these — you'll need them for your Self Assessment return.
The two rates in one line
- 20% — the standard rate for registered subcontractors.
- 30% — for anyone the contractor can't verify with HMRC. If you're on 30%, get registered today: the paperwork is minimal and 10% of your labour income is a huge amount of unnecessary withholding.
- 0% (gross payment status) — for established businesses passing HMRC's turnover, compliance and business tests. You still pay tax normally at year-end; you just don't have anything deducted at source.
Why almost every CIS subcontractor gets a rebate
The reason is simple: 20% is deducted on gross labour, but your actual tax bill is based on profit after expenses and after your £12,570 personal allowance. On a typical £45k labour year with £4k of legitimate business expenses:
- CIS deducted at source: £45,000 × 20% = £9,000
- Actual tax owed on £41k profit (after expenses): roughly £5,686 income tax + £1,706 Class 4 NI + £179 Class 2 NI = £7,571
- Rebate = £9,000 − £7,571 = £1,429
File your Self Assessment shortly after 6 April to get this rebate back within about 4–6 weeks. If you file at the last minute (31 January), you're loaning HMRC that money for another 9 months.
Frequently asked questions
What is the Construction Industry Scheme (CIS)?
CIS is HMRC's mechanism for collecting tax at source from subcontractors in the UK construction industry. The contractor (whoever is paying you) deducts either 20% or 30% from the labour portion of your invoice and pays it to HMRC on your behalf. You then reconcile the amount already paid against your actual tax bill on your Self Assessment return each year — often getting a rebate because the deductions collect more than you'd otherwise owe.
20% or 30% — which rate applies to me?
20% if you're registered with HMRC as a subcontractor and the contractor has verified you using your UTR. 30% if you're not registered or the contractor can't verify you. 0% (gross payment status) if you meet HMRC's turnover test (£30k+ net of materials) and pass the compliance and business tests. Register at HMRC as soon as you start subcontracting — the difference is genuinely huge and there's no downside to being registered.
Is CIS deducted from the whole invoice, including materials?
No — CIS only applies to the labour portion. Direct cost of materials, VAT, and cost of plant hire (where the plant is provided by you) are excluded. If you invoice £1,000 labour + £500 materials, the deduction is 20% × £1,000 = £200, not 20% × £1,500. Always itemise materials separately on invoices so the contractor deducts CIS correctly.
Why do CIS subcontractors usually get a tax rebate?
Because 20% deducted at source is a rough tax charge that ignores your personal allowance (£12,570 tax-free), business expenses, and Class 4 NI thresholds. On a typical sub-£40k year, your actual tax + NI is often significantly less than the CIS already deducted, so you claim the difference back via Self Assessment. Many subcontractors receive rebates of £1,500–£5,000 per year — file promptly after 6 April to get yours faster.
Do I still pay National Insurance under CIS?
Yes. CIS deductions cover income tax only — they don't cover Class 2 or Class 4 NI. On your Self Assessment you'll owe Class 2 NI (a flat £3.45/week for 2024/25, though voluntary in some cases) and Class 4 NI (6% on profits £12,570–£50,270, 2% above). Both are settled at the end of the year alongside any tax owed.
What isn't included in this calculator?
Personal-allowance taper above £100k, student loans, other PAYE income you also have alongside subcontracting, and the payment-on-account schedule (which brings forward two 50% payments toward next year's bill). This tool is aimed at the typical sole-trader subcontractor with CIS as their main income.
Estimates based on 2024/25 UK tax rates. Not tax advice — consult an accountant familiar with CIS if your situation is non-standard.
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