CIS Calculator 2026 | UK Construction Tax Deduction | Free

  • Adam
  • January 21, 2026

Calculate UK CIS tax deductions for 2025-26. 20% or 30% rates, gross-up calculator, net pay & HMRC-compliant subcontractor payments. Free instant results!

🏗️ CIS Calculator 2026

UK Construction Industry Scheme Tax Deduction Calculator

HMRC Compliant | 2025-26 Tax Year | By: OmniCalculator.Space

📊 Understanding UK CIS Tax Deductions

The CIS calculator 2026 helps UK contractors and subcontractors calculate Construction Industry Scheme tax deductions accurately. CIS is a mandatory HMRC scheme where contractors deduct 20% (or 30% for unregistered) from subcontractor payments and remit it directly to HMRC as advance tax payments. Whether you're a main contractor making payments, a subcontractor receiving payments, or an accountant managing construction payroll, this tool calculates CIS deductions, net payments, and provides gross-up calculations when you need to work backwards from a required net amount. All calculations comply with current HMRC guidelines and help you meet your monthly CIS return obligations.

📝 How to Use the CIS Calculator

  1. Choose calculation type: Select "From Gross" to calculate deductions from a gross payment, or "Gross Up" to find the gross amount needed for a specific net payment.
  2. Enter payment amount: Input the gross payment amount (before CIS) or the net amount required by the subcontractor.
  3. Add materials cost: Enter any materials supplied by the subcontractor—these are NOT subject to CIS deduction and will be excluded from the calculation.
  4. Select CIS rate: Choose 0% (gross payment status), 20% (registered subcontractor), or 30% (unregistered subcontractor).
  5. Click "Calculate CIS": View the complete breakdown including CIS deduction, net payment, and contractor obligations to HMRC.
💡 Pro Tip: Always verify subcontractors with HMRC before making the first payment! Use the HMRC online verification service to confirm their CIS status and avoid applying the wrong deduction rate.
🧮 Calculate CIS Deduction
From Gross
Gross Up (Net to Gross)
Payment before CIS deduction
Materials are not subject to CIS deduction
Amount subcontractor should receive
Materials are not subject to CIS deduction
0%
Gross Status
20%
Registered
30%
Unregistered
Net Payment to Subcontractor
£0.00
CIS Deduction: £0.00
Gross Amount
£0
Labour Value
£0
CIS Deduction
£0
Net Payment
£0
Payment Breakdown£0
Gross Payment£0
Materials (non-deductible)£0
Labour (deductible)£0
CIS Deduction @ 20%-£0
Net to Subcontractor£0
Contractor Obligations
Pay to Subcontractor£0
Pay to HMRC£0
Total Outlay£0

📐 CIS Formula & Calculation Method

Labour Value Calculation

Labour = Gross Payment − Materials Cost

The labour element is the portion of the invoice subject to CIS deduction. Materials supplied by the subcontractor are excluded.

CIS Deduction Calculation

CIS Deduction = Labour × Rate (20% or 30%)

The deduction is calculated only on the labour portion. Registered subcontractors = 20%. Unregistered = 30%. Gross status = 0%.

Net Payment Formula

Net Payment = Gross Payment − CIS Deduction

This is the amount the subcontractor actually receives after the contractor withholds CIS tax for HMRC.

Gross-Up Formula (Reverse Calculation)

Gross = (Net Required − Materials × Rate) ÷ (1 − Rate)

Use this when you know the net amount needed and must calculate the gross invoice amount required.

📊 CIS Examples

Example 1: Standard 20% Registered Subcontractor

Scenario: Builder Ltd pays ABC Plastering (registered) £2,000 for labour work only.

Inputs: Gross: £2,000 | Materials: £0 | Rate: 20%

  • Labour Value: £2,000 − £0 = £2,000
  • CIS Deduction: £2,000 × 20% = £400
  • Net Payment: £2,000 − £400 = £1,600

Result: Pay subcontractor £1,600, submit £400 to HMRC

Example 2: Invoice with Materials

Scenario: Contractor pays electrician £3,500 (£1,200 materials + £2,300 labour). Electrician is registered.

Inputs: Gross: £3,500 | Materials: £1,200 | Rate: 20%

  • Labour Value: £3,500 − £1,200 = £2,300
  • CIS Deduction: £2,300 × 20% = £460
  • Net Payment: £3,500 − £460 = £3,040

Result: Pay subcontractor £3,040, submit £460 to HMRC

Example 3: Unregistered Subcontractor (30%)

Scenario: New joiner hasn't registered with HMRC yet. Invoice is £1,500 labour only.

Inputs: Gross: £1,500 | Materials: £0 | Rate: 30%

  • Labour Value: £1,500
  • CIS Deduction: £1,500 × 30% = £450
  • Net Payment: £1,500 − £450 = £1,050

Result: Pay subcontractor £1,050, submit £450 to HMRC. Subcontractor should register ASAP to reduce to 20%!

📊 CIS Deduction Rates Reference Table 2025-26

CIS StatusDeduction RateRequirementsNet Payment (per £1,000 labour)
Gross Payment Status0%Clean tax record, £30k+ annual turnover, HMRC approved£1,000 (no deduction)
Registered20%Verified with HMRC, most common status£800
Unregistered30%Not verified or new subcontractors£700

Source: GOV.UK - Construction Industry Scheme

💡 Important Tips for CIS Tax

  • Verify First: Always verify subcontractors with HMRC before first payment. Incorrect rate = penalties!
  • Materials Exclusion: Only labour is deductible. Ensure materials are itemised separately on invoices.
  • Monthly Returns: Submit CIS returns by 19th of each month. Late = £100+ penalties.
  • Payment Deadline: CIS deductions must be paid to HMRC by 22nd (electronic) or 19th (post).
  • Reclaim CIS: Subcontractors can offset CIS deductions against their Self Assessment tax bill—keep all statements!
  • Register for Gross: If you have clean tax records and £30k+ turnover, apply for gross payment status to avoid deductions.

❓ Frequently Asked Questions

What is the CIS deduction rate for 2025-26?+
The standard CIS deduction rate is 20% for registered subcontractors. Unregistered subcontractors face a 30% deduction. Subcontractors with gross payment status approved by HMRC pay 0% as they handle their own tax directly.
Are materials subject to CIS deduction?+
No, the cost of materials supplied by the subcontractor is NOT subject to CIS deduction. Only the labour element of the payment is deducted. Materials must be clearly itemised separately on invoices to avoid incorrect deductions.
How do I reclaim CIS deductions?+
CIS deductions are offset against your tax bill when you file your Self Assessment tax return. If deductions exceed your tax liability, you can claim a refund from HMRC. Keep all CIS payment statements from contractors as evidence.
What happens if a contractor applies the wrong CIS rate?+
Applying the wrong rate can result in HMRC penalties. If you under-deduct, you may be liable for the difference. Always verify subcontractors using HMRC's online service before making payment to confirm their correct CIS status.
What is the gross-up calculation used for?+
Gross-up is used when you agree to pay a subcontractor a specific net amount and need to calculate the gross invoice needed. For example, if you promise £800 net and CIS is 20%, the gross must be £1,000 (as £200 will be deducted).
How do I apply for gross payment status?+
Apply through HMRC if you have: a clean tax compliance record, annual construction turnover of £30,000+ (or £200,000+ for companies), and have been running a construction business for at least 12 months. HMRC reviews applications and grants status to qualifying applicants.
When must CIS returns be submitted?+
Monthly CIS returns must be submitted to HMRC by the 19th of each month following the tax month. CIS deductions must be paid by the 22nd (electronic) or 19th (post). Late returns attract penalties starting at £100 and increasing for continued non-compliance.

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📚 Official UK Government Resources

Disclaimer: This calculator provides estimates for educational purposes. CIS rules are complex and change periodically. Always verify subcontractor status with HMRC and consult a qualified accountant for professional tax advice.

Created by OmniCalculator.Space — Free calculators for everyone.

Last Updated: January 2026 | UK Tax Year 2025-26

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