CIS Tax Calculator (2026/27)

Work out your CIS deduction

Use the CIS tax calculator above: put in your labour charge, add any materials separately, and choose whether you're registered with HMRC. It returns the 20% or 30% deduction the contractor holds back, what actually lands in your account, and an estimate of how that stacks against your eventual self assessment bill.

What the Construction Industry Scheme actually is

The Construction Industry Scheme (CIS) is HMRC's way of collecting tax from construction work at source. Under it, a contractor takes a slice of every payment made to a subcontractor and sends it straight to HMRC. It isn't a separate tax. It's an advance payment against the Income Tax and National Insurance you'll owe as a self-employed worker, in the same way PAYE works for employees.

The deduction only applies to the labour portion of your invoice. Materials, plant hire you pay for, fuel for that plant, and VAT are all excluded. That single point trips up more subcontractors than any other, because if you don't split labour and materials on your invoice, the contractor can legally deduct from the whole lot.

CIS covers most construction operations in the UK: building, alterations, demolition, repairs, decorating, civil engineering, and site clearance. It runs the same way in England, Scotland, Wales and Northern Ireland, because it's administered by HMRC, not the devolved governments. Your final Income Tax position, though, can differ if you're a Scottish taxpayer, which is covered below.

20% vs 30% CIS deductions: which rate applies to you

There are three CIS statuses, and they decide how much comes off:

• Registered subcontractor: 20% deducted from your labour. This is the standard rate and the one most subcontractors pay.
• Not registered: 30% deducted from your labour. The higher rate is a penalty for not registering with HMRC, and it's entirely avoidable.
• Gross payment status: 0% deducted. You're paid in full and settle everything through self assessment. To qualify you have to pass HMRC's turnover, compliance and business tests.

The gap between 20% and 30% is real money. On £2,000 of labour, 20% holds back £400 while 30% holds back £600, a £200 difference on a single job. Registering is free and usually sorted in a day or two, so the 30% rate almost always means someone simply hasn't completed the paperwork.

How the CIS tax calculator works

The maths behind a CIS deduction is straightforward once materials are stripped out. In plain words:

CIS deduction = (Total invoice − Materials − VAT) × deduction rate

And what reaches you is:

Payment received = Total invoice − CIS deduction

The deduction rate is 0.20 if you're registered or 0.30 if you're not. The contractor reports the figure to HMRC each month and gives you a CIS payment and deduction statement, which is your proof that the tax has already been paid. Keep every one of these statements, because they're what you use to reclaim any overpayment.

The key thing the calculator highlights is that CIS is usually an over-deduction. A flat 20% is taken from your labour with no regard for your Personal Allowance of £12,570, which means your first slice of profit should be tax-free but CIS taxes it anyway. That's why so many subcontractors are owed a refund at the end of the year rather than having more to pay.

Worked example: a self-employed plasterer in 2026/27

Take Daniel, a registered self-employed plasterer working across several sites. Over the 2026/27 tax year he invoices £42,000 for labour and £6,000 for materials, billed separately and clearly itemised. His contractors apply CIS at 20% on the labour only.

CIS deducted during the year: £42,000 × 20% = £8,400. The £6,000 of materials has nothing taken off, so across the year Daniel receives £48,000 − £8,400 = £39,600 into his bank, with £8,400 already sitting with HMRC.

Now the actual tax bill. Say his allowable business expenses (tools, van running costs, insurance, phone) come to £7,000. His taxable profit is £42,000 + £6,000 − £7,000 = £41,000.

• Personal Allowance: £12,570 tax-free, leaving taxable income of £28,430.
• Income Tax: all £28,430 falls in the basic-rate band, taxed at 20% = £5,686.
• Class 4 National Insurance: 6% on profit between £12,570 and £50,270. That's (£41,000 − £12,570) × 6% = £28,430 × 6% = £1,705.80.

His total liability is £5,686 + £1,705.80 = £7,391.80. But CIS already collected £8,400. So Daniel is owed a refund of £8,400 − £7,391.80 = £1,008.20, which HMRC pays back after he files his self assessment return.

That refund exists because the 20% deduction ignored his Personal Allowance and the lower 6% NI rate. The lesson: CIS rarely matches your real bill, so filing on time isn't just a duty, it's how you get your own money back.

2026/27 CIS deduction and tax rates

The deduction rates are set by HMRC's CIS rules. The Income Tax and National Insurance figures your refund depends on are the 2026/27 self-employed rates.

Source: gov.uk – What is the Construction Industry Scheme. Always confirm against the current HMRC guidance, as thresholds are reviewed each tax year.

Scotland and the regional point most CIS guides miss

CIS deductions are identical wherever you work in the UK, because the scheme is HMRC-run. National Insurance is also UK-wide. The one difference is Income Tax: if you're resident in Scotland, your taxable profit is charged at Scottish rates and bands rather than the rest-of-UK rates shown above. That changes the size of your final bill, and therefore your CIS refund, even though the 20% deducted at source was exactly the same.

If you're a Scottish-based subcontractor, work out your eventual liability with the Scotland tax calculator so your refund estimate uses the right bands. The Personal Allowance of £12,570 still applies, as it's set UK-wide.

How to claim your CIS tax refund

If, like Daniel, the CIS taken exceeds what you actually owe, you reclaim the difference through self assessment. The process:

• Gather every CIS payment and deduction statement from your contractors for the tax year (6 April to 5 April).
• Add up your total income, allowable expenses and the CIS already deducted.
• File your self assessment return (SA100 plus the self-employment pages) by 31 January following the tax year end.
• Enter the CIS deductions in the box for tax already taken off, so HMRC offsets them against your bill.
• HMRC works out the difference and refunds any overpayment to your bank, usually within a few weeks of a clean return.

You can file from 6 April, and the earlier you do, the sooner a refund lands. There's no need to wait until January if you're owed money. To sense-check your wider position before filing, the self-employed tax calculator and the tax refund calculator let you model income, expenses and deductions together.

Common mistakes subcontractors make

• Not registering, and paying 30%. The single most expensive error. Registering for CIS with HMRC is free and drops your deduction to 20%. Until you do, contractors must take the higher rate.
• Failing to split labour and materials. If your invoice shows one combined figure, the contractor can deduct CIS from everything, including materials that should be exempt. Always itemise.
• Assuming CIS is the end of it. CIS is a payment on account, not a final tax. You still have to file self assessment, declare all your income, and either claim a refund or settle any shortfall. Higher earners often find CIS hasn't covered enough.
• Losing the deduction statements. No statements, no proof. Without them HMRC can query the amounts you're reclaiming, which delays or reduces your refund. Keep them filed, paper or digital, for at least the tax year plus the records-retention period.
• Forgetting Class 4 NI and the higher rate. If your profit pushes past £50,270, part of it is taxed at 40% Income Tax and you've an extra 2% NI band. A flat 20% CIS deduction won't have covered that, so a higher-earning subcontractor can owe more, not get a refund.
• Treating gross payment status as automatic. 0% deductions are great for cash flow but only if you qualify and stay compliant. Miss filing or payment deadlines and HMRC can withdraw the status.

What to do next

Run your labour figure through the CIS tax calculator to see this year's deduction, then compare it against your likely Income Tax and NI to gauge whether a refund is coming. If your income includes work outside construction, or you have other tax to consider, fold it in with the income tax calculator before you file. Filing accurately and on time is how the over-deducted CIS comes back to you.

This CIS tax calculator gives estimates for guidance only and isn't personal tax or financial advice. Figures are for the 2026/27 tax year; check gov.uk or speak to an accountant for your own situation.

Who should use this calculator

The Construction Industry Scheme requires contractors to deduct tax at source from subcontractors’ payments. This works out the deduction and what actually reaches the subcontractor. The rate depends entirely on registration: 20% if registered, 30% if not, and 0% with gross payment status.

The detail that saves real money is that deductions apply only to the labour element. Materials are excluded, so itemising them separately on an invoice rather than quoting one combined figure directly reduces the deduction — and subcontractors who invoice a single lump sum are over-deducted month after month.

What this calculator assumes

• Deduction rates are 20% registered, 30% unregistered, and 0% with gross payment status.
• The deduction applies to the labour charge only — materials, plant hire and VAT are excluded.
• Deductions are advance payments against the subcontractor’s eventual Income Tax and Class 4 NI.
• The contractor pays the deduction to HMRC monthly.

Limitations — what it does not cover

• The annual reconciliation. CIS deductions are credited against the final Self Assessment bill and frequently produce a refund, because 20% of turnover often exceeds the real liability after expenses.
• Gross payment status, and the turnover and compliance tests to obtain it.
• Verification, which the contractor must complete with HMRC before the first payment.
• The VAT domestic reverse charge in construction, which changes who accounts for VAT.
• Employment status. CIS does not make someone self-employed — that is a separate test.
• Limited company subcontractors, who offset deductions against payroll liabilities instead.