This CIS tax calculator works out the Construction Industry Scheme deduction a contractor takes from your pay — 20% if you're registered, 30% if not — then estimates your year-end CIS tax refund and checks whether you qualify for gross payment status.
Built & maintained by Marcus, freelancer·Figures from HMRC·Last updated July 2026
Updated for 2026/27: CIS deduction rates are unchanged — 20% for registered subcontractors, 30% if you're not registered, and 0% with gross payment status. Deductions apply to your labour only; the cost of materials you buy is excluded. Income tax and NI thresholds are frozen until April 2031.
20%
Standard CIS deduction — registered
30%
Deduction if you're not registered
0%
With gross payment status
£12,570
Tax-free allowance — why refunds happen
£/ yr
£/ yr
CIS deducted this year
£—
paid to HMRC at source
Actual tax due
£—
income tax + Class 4 NI
Estimated refund
£—
after you file your return
Estimate only. This assumes your labour income is all taxed as self-employed profit and CIS is deducted at your chosen rate on the full labour figure. It does not model other income, the trading allowance, capital allowances, student loans, or pension contributions. The £100,000 personal allowance taper is modelled. Your actual refund is worked out by HMRC when you file your Self Assessment return.
Check exactly what a contractor should deduct from a single invoice. CIS is taken from your labour only — the cost of materials, plant hire and VAT are excluded from the deduction.
£
£
Gross invoice
£—
labour + materials + VAT
CIS deducted
£—
on labour only
Net payment to you
£—
what lands in your account
Keep every deduction statement. Your contractor must give you a CIS payment and deduction statement within 14 days of the end of each tax month. These are your proof of tax already paid — you'll need the totals to claim your refund through Self Assessment.
Only the actual cost of materials, plant hire, and fuel for plant is excluded from CIS. Your own tools and equipment, van fuel, travel, accommodation and protective clothing are not deductible materials and stay part of the labour figure that CIS is charged on.
With gross payment status, contractors pay you in full with no CIS deducted — you settle all your tax through Self Assessment instead. To qualify you must pass a turnover test (plus a business and a compliance test). Check the turnover test below.
£
The turnover test is only the first hurdle. You must also pass the business test (run your construction business through a bank account in the UK) and the compliance test (all tax returns and payments — Self Assessment, PAYE, VAT, CIS — filed and paid on time in the previous 12 months). HMRC reviews gross payment status annually and can remove it.
How the Construction Industry Scheme (CIS) Works
Under the Construction Industry Scheme, contractors deduct money from a subcontractor's payments and pass it to HMRC. These deductions count as advance payments towards the subcontractor's income tax and National Insurance. CIS is not an extra tax — it's tax collected early, at source, before you've even filed your return.
If you're a subcontractor, you're still self-employed. You invoice as normal, but the contractor withholds a percentage of your labour and pays you the rest. At the end of the tax year you file Self Assessment, add up everything that was deducted, and reconcile it against the tax you actually owe. The CIS deduction calculator above works out that flow for a single invoice or a whole year.
Here's the quirk that puts money back in most subcontractors' pockets: CIS is deducted at a flat 20% of your labour, but that rate ignores two things that reduce your real tax bill.
1. Your tax-free personal allowance
The first £12,570 of profit is taxed at 0%. But CIS was already deducted at 20% on the labour that produced it — so that portion is refunded.
2. Your business expenses
Tools, van running costs, insurance, materials and other allowable expenses reduce your taxable profit. CIS ignored all of them and taxed your gross labour — so you've usually overpaid.
The CIS refund calculator above puts real numbers on this. On £45,000 of labour with £6,000 of expenses, a registered subcontractor has £9,000 deducted through the year but actually owes around £6,872 in income tax and Class 4 NI — leaving roughly a £2,128 refund. Typical refunds land between £500 and £3,000, and the more expenses you legitimately claim, the larger the refund.
The catch: the refund is only paid after you file your Self Assessment return for the tax year. Keep every payment and deduction statement — those totals are what you claim back.
What Counts as Materials (Excluded from CIS)
CIS is charged on labour only. Getting the materials split right matters — anything wrongly left in the labour figure is taxed 20% early and tied up with HMRC until your refund. This construction industry scheme calculator excludes materials from the deduction, but only genuine costs qualify:
Excluded from CIS ✓
Still counts as labour ✕
Direct materials you paid for (bricks, timber, fixings, paint)
Your own tools and equipment
Plant hire, and fuel for that hired plant
Van fuel and travel to site
Consumable stores used up in the work
Accommodation and subsistence
Manufacturing or prefabricating materials off-site
Protective clothing / PPE, and any profit margin on materials
VAT is never part of CIS. If you're VAT-registered, CIS is worked out on the labour value before VAT. Note that most construction services between VAT-registered businesses now fall under the domestic reverse charge — the contractor accounts for the VAT, not you.
CIS Deduction Rates: 20% vs 30% vs Gross
There are three deduction rates, and which one applies to you depends purely on your registration status with HMRC:
Rate
Who it applies to
20%
Subcontractors registered for CIS with HMRC (also called "net payment status"). This is the standard rate for most subcontractors.
30%
Subcontractors who haven't registered, or whom the contractor can't verify. Registering is free and drops you to 20% — well worth doing.
0%
Subcontractors with gross payment status. Paid in full with nothing deducted; all tax settled at Self Assessment.
The rate doesn't change how much tax you ultimately owe — it only changes how much is withheld up front. A 30% deduction ties up more of your cash than 20%, but you reclaim the difference through Self Assessment either way. To register, sign up as a CIS subcontractor through your HMRC online account or when you register for Self Assessment.
Gross Payment Status: Should You Apply?
Gross payment status lets contractors pay you in full — no 20% withheld — so you hold onto your cash all year and settle the full tax bill at Self Assessment. For a busy subcontractor that's a meaningful cashflow boost. But you have to qualify, and keep qualifying.
The three tests
Turnover test
Net construction turnover (labour only, excluding VAT and materials) of at least £30,000 in the last 12 months for a sole trader — or £30,000 per partner/director, or £100,000 for the whole business, whichever is lower. Use the Gross Payment Status tab above to check.
Business test
You run your construction business through a bank account, in the UK.
Compliance test
All your tax returns and payments — Self Assessment, PAYE, VAT and CIS — filed and paid on time in the previous 12 months. HMRC reviews this annually and can withdraw gross status if you slip.
Trade-off: gross status frees up cashflow but removes the "forced saving" of CIS. If you'd struggle to set aside tax through the year, the standard 20% deduction — and the refund it usually produces — can be the safer option.
Frequently Asked Questions
How much CIS tax will be deducted from my pay?
If you're registered under the Construction Industry Scheme, contractors deduct 20% from the labour part of your invoices. If you're not registered, the rate is 30%. With gross payment status it's 0%. The deduction only applies to your labour — the cost of materials, plant hire and VAT is excluded. So on a £2,000 labour invoice, a registered subcontractor has £400 deducted and is paid £1,600 (plus any materials and VAT in full).
Will I get a CIS tax refund?
Most subcontractors on the 20% rate do. CIS is deducted at a flat 20% of your labour with no allowance for your £12,570 tax-free personal allowance or your business expenses. When you file your Self Assessment return, HMRC works out your actual tax (income tax after the personal allowance and expenses, plus Class 4 NI) and refunds the difference. A typical refund is £500–£3,000, though it depends entirely on your income and expenses.
When and how do I claim my CIS refund?
You claim it through your annual Self Assessment tax return after the tax year ends on 5 April. On the return you enter your total income, expenses, and the CIS deductions taken during the year (from your payment and deduction statements). HMRC offsets the CIS against your income tax and Class 4 NI bill; if you've overpaid, they repay the balance — usually within a few weeks of filing. You cannot get the refund before the tax year ends.
Are materials included in the CIS deduction?
No. CIS is only charged on your labour. The actual cost of materials you supply — plus plant hire and fuel for that plant — is excluded from the deduction. However, this only covers the genuine cost: your own tools and equipment, van fuel, travel, accommodation and protective clothing are not deductible materials and stay part of the labour figure CIS is charged on. Any profit margin you add to materials is also subject to CIS.
What's the difference between 20% and 30% CIS deductions?
The 20% rate applies once you've registered as a CIS subcontractor with HMRC. If you haven't registered, contractors must deduct at 30% instead. Registering is free and simply lowers the rate — it doesn't change how much tax you actually owe, but a lower deduction means less of your money is tied up with HMRC during the year. Either way you reconcile the real figure through Self Assessment.
What is gross payment status and should I apply?
Gross payment status means contractors pay you in full with no CIS deducted, and you settle all your tax at Self Assessment. To qualify you must pass three tests: a turnover test (net construction turnover of at least £30,000 per sole trader, partner or director, or £100,000 for the whole business), a business test (run through a UK bank account), and a compliance test (all tax returns and payments up to date for the last 12 months). It's worth applying if the cashflow benefit outweighs the discipline of budgeting for a lump-sum tax bill — HMRC reviews the status every year.
Do CIS subcontractors pay Class 2 and Class 4 National Insurance?
CIS subcontractors are self-employed, so the same National Insurance rules apply as any sole trader. You pay Class 4 NI — 6% on profits between £12,570 and £50,270, and 2% above — through Self Assessment. Class 2 NI stopped being a mandatory charge from April 2024; if your profits are below the Small Profits Threshold (£7,105 in 2026/27) you can still pay it voluntarily to protect your State Pension. Use our UK self-employed tax calculator to see your full income tax and NI bill.
Sources & how we calculate
This CIS tax refund calculator applies the HMRC Construction Industry Scheme deduction rates (20% registered, 30% unregistered, 0% gross) to your labour, then reconciles them against 2026/27 self-employed income tax and Class 4 National Insurance to estimate your refund. The gross payment status check uses HMRC's £30,000-per-person and £100,000-business turnover thresholds. Everything is computed in your browser from the figures you enter.
Estimate only, not tax advice. Your actual CIS refund is determined by HMRC when you file Self Assessment. Anyone with other income, VAT reverse-charge questions, or gross payment status applications should confirm with HMRC or a qualified accountant.
Related Tools
More calculators for UK contractors and the self-employed.