CIS deduction rates: 20%, 30% and 0%
There are three rates. HMRC tells you which one to use when you verify the subbie.
- 20%
The subbie is registered for CIS.
- 30%
The subbie is not registered, or HMRC cannot match their details.
- 0%
The subbie has gross payment status. You pay them in full.
What the rate is taken off
Labour only. Start with the invoice total. Take off:
- VAT.
- Materials the subbie paid for.
- Plant hire, consumables and fuel they paid for (but not fuel for travelling).
What is left is the labour. The rate is taken off that.
Worked example
An invoice of £1,150 before VAT, with £50 of materials. Labour is £1,100.
| Rate | Hold back for HMRC | Pay the subbie |
|---|---|---|
| 20% | £220.00 | £930.00 |
| 30% | £330.00 | £820.00 |
| 0% | £0.00 | £1,150.00 |
What happens to the money you hold back
You pay it to HMRC by the 22nd after the tax month ends (the 19th if you pay by post). It counts towards the subbie's own tax and National Insurance bill.
Not sure which rate? How to verify a subcontractor.
We checked this against the sources below on 24 Oct 2026. Rules change. You stay responsible for your own tax, so check anything unusual with your accountant or on gov.uk.
Sources
- GOV.UK, "What you must do as a Construction Industry Scheme (CIS) contractor" (gov.uk/what-you-must-do-as-a-cis-contractor)
- HMRC, "Construction Industry Scheme: a guide for contractors and subcontractors (CIS 340)" (gov.uk/government/publications/construction-industry-scheme-cis-340)
Let Subbo do this every week
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