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CIS Deductions Calculator (UK 2024)

Free CIS deductions calculator. Calculate CIS deductions for verified, unverified, and gross payment subcontractors. Handles materials deductions correctly.

CIS Deductions Calculator

Calculate CIS deductions for subcontractor payments using gross amount, materials exclusion, and verification status.

£

Enter the invoice amount before VAT.

£

Materials supplied by subcontractor and excluded from CIS deduction.

Calculation Breakdown

Gross Payment£10,000.00
Less: Materials (not subject to CIS)- £2,000.00
Labour Element (CIS applies)£8,000.00
CIS Deduction (20%)
- £1,600.00
Net Payment to Subcontractor£8,400.00

Gross £10000.00 with £2000.00 materials leaves £8000.00 labour. At 20%, CIS deduction is £1600.00 and net payment is £8400.00.

Labour Subject to CIS
£8,000.00
CIS Deduction
£1,600.00
Net Payment
£8,400.00

Remember to include this deduction in your monthly return

This deduction of £1,600.00 should be included in your monthly CIS return to HMRC by the 19th of the following month.

This calculator provides guidance only. CIS rules depend on contract structure and HMRC verification status at payment time.

  • VAT is excluded from CIS deduction calculations
  • Verify subcontractor status with HMRC before each payment run
  • Retain evidence of verification and deduction records for audit
  • Consult your accountant for contract-specific treatment

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Frequently Asked Questions

How do I calculate CIS deductions?
CIS deduction = (Gross payment - Materials) x Deduction rate. For example, a £10,000 payment with £2,000 materials and 20% rate: (£10,000 - £2,000) x 20% = £1,600 deduction. Net payment = £8,400.
Are VAT amounts included in CIS calculations?
No. CIS deductions are calculated on the net (before VAT) amount. If an invoice shows £10,000 + £2,000 VAT = £12,000 total, the CIS calculation is based on £10,000 (minus any materials).
What if the subcontractor supplies their own materials?
Materials supplied by the subcontractor are excluded from CIS deduction. The invoice should clearly separate labour and materials. Only the labour element is subject to CIS.
How do I record CIS deductions for my monthly return?
Keep records of each payment showing: subcontractor name and UTR, gross payment, materials (if any), deduction rate, deduction amount, and net payment. These details are needed for your monthly CIS return.

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