CIS deduction calculator

What does the calculator work out?

It works out the CIS deduction on one subcontractor invoice, what you pay the subcontractor, what you pay HMRC and the figures for their statement. It can also work back from a payment to the invoice behind it.

It is an estimate from the figures you type in. You still check the subcontractor’s verification result before you pay, because that sets the rate. How a deduction is worked out, step by step, is in our guide to CIS deductions.

Is the deduction 20%, 30% or nothing?

It is 20% for a subcontractor HMRC has matched, 30% for one it has not, and nothing for one with gross payment status. The rate only ever applies to the labour on the invoice, never to materials or VAT.

Pick the one HMRC gave you when you verified them. HMRC can now cancel gross payment status straight away, so check it each time rather than going from memory.

Are materials and VAT taken off first?

Yes. The calculator takes off the VAT and the materials, and applies the rate to what is left. GOV.UK says to start with the total (gross) amount of the subcontractor’s invoice and then take off the things that are not labour.

The materials figure depends on whether the subcontractor is VAT registered. HMRC says:

• Where the subcontractor is registered for VAT, any VAT they had to pay on materials should be excluded from the cost of materials when calculating the CIS deduction.
• Where the subcontractor is not registered for VAT, any VAT they had to pay on materials should be included in the cost of materials when calculating the CIS deduction.

Source: HMRC, CIS340 Appendix D.

The full list of what counts as materials is in our guide to what counts as materials under CIS.

Do I put in the invoice with VAT or without?

Either. The deduction is never taken from VAT, so the calculator works on the figure before VAT. If your figure has VAT in it, tick “There is VAT on this invoice” and choose “Including VAT”. If the invoice shows the VAT amount, you can type that in instead. Materials go in before VAT either way, because a subcontractor who charges VAT is VAT registered.

If their invoice says the reverse charge applies, tick “The reverse charge applies” as well, and you pay them no VAT. Our VAT reverse charge checker tells you whether it applies.

At 20% the VAT is a sixth of the total, not a fifth. An invoice of £2,880.00 has £480.00 of VAT, so £2,400.00 before VAT. With £400.00 of materials, the deduction is £400.00.

How do I work out CIS from net to gross?

Add the deduction back. Take the materials off the payment, divide what is left by 0.8 at 20% or 0.7 at 30%, then add the materials back. With gross payment status nothing comes off, so the payment and the invoice are the same.

For example, £2,000.00 paid with £400.00 of materials at 20%: £1,600.00 divided by 0.8 is £2,000.00 of labour, so the invoice is £2,400.00 (or a penny less: see below). Dividing the whole payment instead gets it wrong whenever there are materials, because materials are paid in full. Choose “Work back from the payment” at the top of the calculator to do it with your own figures.

What should I invoice to be paid a set amount?

Put the amount you want to be paid into “Work back from the payment”, with your materials and your CIS rate, and it gives the invoice to raise. Your contractor works out the deduction on the day they pay you, at the rate HMRC gives them, so the payment is not guaranteed. If two invoices a penny apart pay the same, it shows both.

Why can two invoice amounts give the same payment?

Because the deduction is rounded down to the penny. A penny more on the invoice sometimes goes to HMRC and adds nothing to the payment, so two invoices a penny apart pay the same: £2,400.00 and £2,399.99 both pay £2,000.00 in the example above. When that happens the calculator shows both, so you can check which one is on the invoice.

HMRC’s CIS guide (CIS340) does not set a rounding rule. Its own worked statement rounds down, and so do we.

What do I put in for retention?

Put in only the part you are paying now, not the amount you are holding back. Retention is not deducted until you pay it, and when you release it you work it out again at the subcontractor’s status on that day. How CIS works with retention

What is a contra or a set-off?

Both are money you take back from an invoice, and they are treated differently. A contra is a charge for something you supplied to the subcontractor, such as surplus materials. A set-off is money you hold back because you believe the work was not right.

• A contra does not reduce what the deduction is worked out on. Put in the full invoice, before your charge.
• A set-off does reduce it. Put in the reduced figure.

Source: HMRC CIS manual, CISR15030.

When does CIS not apply?

When the payment is outside the scheme altogether, and then you deduct nothing, whatever a calculator says. The calculator cannot know who you are paying, so check this first.

• Payments to a local authority or other public body. Outside CIS since 6 April 2026.
• Most payments from a landlord to a tenant. Outside CIS since 6 April 2024.
• Work that is not a construction operation, and payments made by somebody who is not a contractor.

Source: HMRC, CIS reform from 6 April 2026, and CISR14048 for landlords and tenants.

What do I do with the result?

Pay the subcontractor the amount shown, and send HMRC the deduction through your monthly CIS return. The return is due by the 19th of the month after each tax month ends. GOV.UK says You’ll be left with the net amount you need to pay the subcontractor once the deduction has come off.

You also owe the subcontractor a statement. you must give the subcontractor a payment and deduction statement within 14 days of the end of each tax month. The “Copy these figures” button gives you the amounts it needs. What the statement must show

To turn a month of payments into a statement ready to print, use our free CIS statement template.

I’m the subcontractor. What do I do with it?

Check it against the statement your contractor gives you, because the deduction should match. The tax taken off counts towards your own bill: GOV.UK says they count as advance payments towards the subcontractor’s tax and National Insurance bill.

If more was taken off than you owe, you can claim it back. Our CIS tax refund calculator estimates how much for the year, and our guide explains how to claim a CIS refund.

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