What the CIS deduction on your payslip means
- pay
- cis
- workers
You finish the week. The money arrives. It is less than you expected.
Most of the time this is CIS. It is not the company keeping your money. It is tax, paid to HMRC in your name, before it reaches you.
Here is what it is, and how to check it is right.
What CIS is
CIS is the Construction Industry Scheme. Under it, the company that hires you takes tax off your pay and sends it to HMRC. This happens before you are paid.
The money is not lost. It counts towards your tax bill for the year.
The three rates
There are only three. Which one you get depends on your status with HMRC.
| Your status | Taken off |
|---|---|
| Registered under CIS | 20% |
| Not registered | 30% |
| Gross payment status | 0% |
If 30% is coming off, you are probably not registered. Registering takes one call to HMRC. It drops your deduction to 20% straight away. That is 10% of every day you work, so it is worth doing this week rather than next month.
What CIS is taken off
CIS comes off your labour only.
It is not taken off materials you paid for. It is not taken off plant hire you paid for. But this only works if you show them as separate lines.
Put one number for everything on your invoice, and the whole number can be treated as labour. You then lose money that was never taxable.
So put materials on their own line. Every time.
The statement you are owed
The company must give you a payment and deduction statement within 14 days of the end of each tax month. It shows what you were paid and what was taken off.
Keep every one. At the end of the year they are the proof of what you have already paid. Without them you are asking HMRC to take your word for it.
Getting money back
CIS is often more than you actually owe. You have a personal allowance, and you have costs. Most workers on 20% have paid too much by the end of the year.
You claim it back on your Self Assessment tax return. This is the part people skip, and it is usually the largest single cheque of their year.
What to check this week
- Are you registered under CIS. If you are on 30%, you are not.
- Does your invoice show materials on a separate line from labour.
- Have you kept every deduction statement for this tax year.
Where these rules come from
The rates and the rules on statements are HMRC's, not ours. Read them at gov.uk — Construction Industry Scheme, and if your case is unusual, speak to an accountant. This page is a plain-English summary, not tax advice.
On VORDO, your hours are saved as you work them. Your invoice is built from them, with labour and materials on separate lines. So the deduction comes off the right number.
You are never charged. The company that hires you pays our fee, on top of your day rate. Find work near you — it is free to join.