CIS deduction calculator
Put in your labour and materials and see the CIS deduction, what the contractor should pay you, and how VAT or the domestic reverse charge changes the figures.
How CIS deductions work
Under the Construction Industry Scheme, a contractor takes money off a subcontractor's payment and pays it to HMRC as an advance on the subcontractor's tax and National Insurance. The rate depends on your status with HMRC:
- 20% if you're registered for CIS
- 30% if you're not registered
- 0% if HMRC has given you gross payment status
The deduction is taken from the labour part of your invoice only. It isn't taken from VAT, from materials you bought for the job, or from some other costs such as equipment hire and fuel used for the work (other than travel). That's why it's worth showing labour and materials separately on every invoice.
Worked example
You're registered for CIS (20%) and not VAT registered. You invoice £2,000 labour and £500 materials. The contractor deducts 20% of £2,000, which is £400, and pays you £2,100. The £400 goes to HMRC towards your tax bill.
For the full invoice layout, see how to show CIS on an invoice. If you and the contractor are both VAT registered, the domestic reverse charge usually applies too.
General information based on HMRC guidance (checked October 2026), not tax advice. The contractor works out the deduction after checking your status with HMRC.
Let PaySorted do the sums
PaySorted works out CIS and VAT on every invoice, splits labour and materials for you, and chases the contractor if they pay late.
Questions
What percentage is CIS deducted at?
20% if you're registered for CIS, 30% if you're not, and nothing if you have gross payment status.
Is CIS deducted from materials?
No. CIS is deducted from labour only, not from materials you bought for the job, VAT, or certain other costs such as equipment hire.
Is CIS deducted from VAT?
No. CIS is worked out on the amount before VAT.
How do I get CIS deductions back?
They count towards your tax and National Insurance. Include them on your Self Assessment tax return (or your company's payroll submissions) and any overpayment is refunded.
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