Using a CIS deduction calculator
Enter the labour amount, qualifying materials, and the CIS rate to estimate a deduction. This helps contractors and subcontractors sense-check payments before invoices are settled.
For operational teams, linking quoting, jobs, and costs in one place can reduce admin time and payment disputes.
Understanding CIS
What is the Construction Industry Scheme (CIS)?
Under the Construction Industry Scheme (CIS), contractors deduct money from a subcontractor's payments and pass it to HM Revenue and Customs (HMRC). The deductions count as advance payments towards the subcontractor's tax and National Insurance.
- 1 Contractors must register for the scheme.
- 2 Subcontractors don't have to register, but deductions are taken at a higher rate if they're not registered.
- 3 Deductions are only made on the labour part of the invoice, not on materials or VAT.
Common Questions
Frequently asked questions about CIS
What are the CIS deduction rates? + -
There are three rates: 20% for registered subcontractors, 30% for unregistered subcontractors, and 0% if the subcontractor has gross payment status.
Do I deduct CIS from materials? + -
No. You only deduct CIS from the labour element of the invoice. You must exclude the cost of materials, VAT, plant hire, and manufacturing costs.
Who needs to register for CIS? + -
You must register as a contractor if you pay subcontractors for construction work, or if your business does not do construction work but you have spent more than £3 million on construction in the period since your last accounting date. Subcontractors should register to avoid the higher 30% deduction rate.
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