CIS registration for subcontractors: how to do it
Who needs to register for CIS, how to do it, what gets deducted and how you get it back.
· 5 min read
YOUR FIVE-MINUTE TOOLKIT
Day rate calculator for UK trades
Work out a day rate that covers your pay, time off and business costs. Change the figures to suit your working year.
What should my day rate be?
YOUR DAY RATE EX VAT
£299.87
Not VAT registered. No VAT added.
To earn £40,000.00 a year before tax you need to charge £299.87 a day for 192.95 paid days.
Before tax selected: this is pay before Income Tax and National Insurance.
- Half day
- £164.9355% of the day rate
- Hourly
- £37.48Day rate divided by 8 hours
- Days you can work
- 227
- Paid days
- 192.95
Where the turnover goes
Each numbered segment matches the text table. Hover or focus a segment for its value.
Your before-tax pay: £40,000.00
Pension budget: £2,000.00
Business costs: £10,600.00
Profit buffer: £5,260.00
| Part | Amount |
|---|---|
| Your before-tax pay | £40,000.00 |
| Pension budget | £2,000.00 |
| Business costs | £10,600.00 |
| Profit buffer | £5,260.00 |
| Needed turnover | £57,860.00 |
How we worked this out
- Weeks worked: 52 − 4 = 48.
- Days you can work: 48 × 5 − 8 − 5 = 227.
- Paid days: 227 × (1 − 15%) = 192.95.
- Before-tax pay: £40,000.00.
- Pension budget: £40,000.00 × 5% = £2,000.00.
- Business costs: £3,000.00 + £3,500.00 + £1,200.00 + £300.00 + £1,000.00 + £400.00 + £200.00 + £600.00 + £200.00 + £200.00 = £10,600.00.
- Base turnover: £40,000.00 + £2,000.00 + £10,600.00 = £52,600.00.
- Buffer: £52,600.00 × 10% = £5,260.00.
- Needed turnover: £52,600.00 + £5,260.00 = £57,860.00.
- Day rate: £57,860.00 ÷ 192.95 paid days = £299.87 ex VAT.
Money lines are rounded half up to pennies. Totals sum the shown lines. Rounded taxes can leave net pay a penny above your target.
VAT registration depends on taxable turnover in a rolling 12 months, or the next 30 days, not simply this annual estimate.
Price a job
YOUR JOB PRICE
£944.59
3 days of your time, plus the costs and allowances below.
- Ex VAT
- £944.59
- VAT
- £0.00
- Deposit (25%)
- £236.15
- Balance before CIS
- £708.44
- Profit including your pay
- £944.59
- CIS taken off
- £0.00
- What lands in your bank
- £944.59
Profit includes your own labour as pay. It is before Income Tax, National Insurance and your annual overheads. VAT is not profit.
Deposit and balance split the invoice total before CIS. What lands in your bank is the whole invoice total less the estimated CIS deduction, not just the final balance. CIS is an advance tax payment, not a reduction in your price or profit.
| Line | Amount |
|---|---|
| Your labour | £899.61 |
| Helpers | £0.00 |
| Materials including markup | £0.00 |
| Travel and parking | £0.00 |
| Waste and skip | £0.00 |
| Subtotal | £899.61 |
| Contingency | £44.98 |
| Price ex VAT | £944.59 |
| VAT | £0.00 |
| Total | £944.59 |
How we worked this out
- Your labour: 3 days × £299.87 = £899.61.
- Helpers: 0 × 3 days × £150.00 = £0.00. Total labour £899.61.
- Materials: £0.00 cost × (1 + 15%) = £0.00 charged.
- Travel: 0 miles × 2 × 1 trips × £0.55 per mile + £0.00 parking and road charges = £0.00.
- Subtotal: £899.61 labour + £0.00 materials + £0.00 travel + £0.00 waste + £0.00 extras = £899.61.
- Contingency: £899.61 × 5% = £44.98. Ex VAT price £944.59.
- VAT: £944.59 × 0% = £0.00. Total £944.59.
- Deposit: £944.59 × 25% = £236.15. Balance: £944.59 − £236.15 = £708.44.
- Profit including own pay: £944.59 − £0.00 materials cost − £0.00 helpers − £0.00 travel cost − £0.00 waste − £0.00 extras cost = £944.59.
- CIS: (£944.59 price ex VAT − £0.00 direct materials cost) × 0% = £0.00. Bank receipt: £944.59 − £0.00 = £944.59.
CIS is calculated on the price ex VAT less the materials cost you paid, without markup. Travel, waste, extras, contingency and materials markup stay in the deduction basis. VAT is never included. A contractor may treat some costs differently, so check your CIS statement. GOV.UK CIS deductions, checked 10 November 2026.
Use costs after any VAT you can reclaim. Extras are treated as both a cost and a charge before contingency. Each money line is rounded half up to whole pence when created. Totals sum the shown lines.
Day rate ex VAT
£299.87
About these figures
Figures for the 2026/27 tax year, checked 10 November 2026. Estimates only. Check with your accountant.
Class 2 is treated as paid when profits are at least £7,105.00. Below that, voluntary Class 2 is £3.65 a week and is not included here. VAT figures are current rules, not tax-year-specific allowances.
Income Tax figures · National Insurance figures · VAT rates · VAT registration
The mileage pricing allowance starts at 55p per business mile, HMRC's flat rate for the first 10,000 miles for 2026 to 2027. GOV.UK simplified vehicle expenses, checked 11 November 2026. This is a pricing allowance, not a tax calculation.
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A day rate that covers your working year
Your invoice funds pay, the van, tools and non-paid time. These examples are budgets, not recommended market prices.
How to use the calculator in four steps
- Set your pay. Choose your trade and annual pay target. Select before tax for a profit target, or after tax to work back from pay after estimated Income Tax and Class 4 National Insurance. Trade changes the wording, not the maths.
- Plan your year. Enter working days, holidays, bank holidays and sick or bad weather days. Include non-paid time for quotes, admin and buying materials. Use your diary rather than assuming every available day earns money.
- Count your costs. Replace every example cost with your annual budget. Add pension and buffer percentages. Choose your VAT status. Costs are used as entered; the tool does not recover input VAT for you.
- Check the result. Review the daily, half-day and hourly figures. Enter daily output for a rate per m². Compare with completed jobs before quoting.
The formulas in words
Weeks worked are 52 minus holiday weeks. Multiply those weeks by working days per week, then subtract bank holidays and sick days. Paid days are the remaining days multiplied by one minus the non-paid percentage.
Pension is before-tax pay multiplied by the pension percentage. Add pay, pension and annual costs to get base turnover. Buffer is that base multiplied by the buffer percentage. Add the buffer, then divide needed turnover by paid days for the day rate. Half day is 55% of that rate; hourly is one eighth. Divide by daily square metres for the area rate. Standard VAT adds 20% when registered.
Two worked examples
The floor fitter wants £40,000.00 before tax and is not VAT registered. The joiner wants £40,000.00 after tax, is VAT registered and completes 20 m² per paid day. Both use five days a week, four holiday weeks, eight bank holidays, five sick days and 15% non-paid time: 48 weeks, 227 available days and 192.95 paid days.
| Cost | Floor fitter | Joiner |
|---|---|---|
| Van finance or depreciation | £3,000.00 | £3,000.00 |
| Fuel | £3,500.00 | £3,500.00 |
| Van insurance | £1,200.00 | £1,200.00 |
| Public liability insurance | £300.00 | £300.00 |
| Tools and repairs | £1,000.00 | £1,000.00 |
| Phone | £400.00 | £400.00 |
| Software | £200.00 | £200.00 |
| Accountant | £600.00 | £600.00 |
| Workwear | £200.00 | £200.00 |
| Training | £200.00 | £200.00 |
| Amount | Floor fitter | Joiner |
|---|---|---|
| Before-tax pay (sole trader profit) | £40,000.00 | £49,637.57 |
| Estimated Income Tax | £5,486.00 | £7,413.51 |
| Estimated Class 4 National Insurance | £1,645.80 | £2,224.05 |
| Pay after those taxes | £32,868.20 | £40,000.01 |
| Pension budget, 5% | £2,000.00 | £2,481.88 |
| Total business costs | £10,600.00 | £10,600.00 |
| Base turnover: pay, pension and costs | £52,600.00 | £62,719.45 |
| Buffer, 10% of base turnover | £5,260.00 | £6,271.95 |
| Needed annual turnover, ex VAT | £57,860.00 | £68,991.40 |
| Day rate, ex VAT | £299.87 | £357.56 |
| Half day, ex VAT | £164.93 | £196.66 |
| Hourly rate, ex VAT | £37.48 | £44.70 |
| VAT on one day | £0.00 | £71.51 |
| Day total including any VAT | £299.87 | £429.07 |
| Rate per m², ex VAT | Not entered | £17.88 |
The joiner needs £49,637.57 before tax. Rounded money lines add up exactly; net pay may exceed the target by a penny.
Job example: £1,350.00 labour, £575.00 materials, £64.00 travel and £50.00 waste give £2,039.00 subtotal. Add £101.95 contingency and £428.19 VAT: total £2,569.14. Deposit £642.29; balance £1,926.85. CIS: (£2,140.95 − £500.00) × 20% = £328.19; bank £2,240.95.
Tax, VAT and the limits of this estimate
Last checked: . For 2026/27 in England, Wales and Northern Ireland, the Personal Allowance is £12,570. Income Tax is 20% on the first £37,700 of taxable income, 40% above that up to total income of £125,140, and 45% above £125,140. Allowance falls by £1 per £2 above £100,000. Scotland has different Income Tax bands.
Class 4 National Insurance is 6% on profits above £12,570 up to £50,270, then 2%. Class 2 counts as paid at profits of £7,105 or more. Below that, voluntary payments are £3.65 weekly and are excluded here.
Standard VAT is 20%. VAT registration is required above £90,000 taxable turnover in a rolling 12 months, or if turnover will exceed £90,000 in the next 30 days alone. This annual budget is not a registration test.
Tax is estimated on before-tax pay alone. Costs are added separately, not deducted again. Pension has no assumed tax relief. Buffer is not taxed here, although actual extra profit may be taxable. Other income, student loans, benefits, tax credits and other adjustments are excluded. Check your position with an accountant. For payments under CIS, see the GOV.UK deduction rules.
Day rate questions
How do I work out my day rate?
Add your annual before-tax pay, pension budget and business costs, then add a buffer. Divide that total by the days you expect to be paid for, not every working day. Use your own records for holidays, quoting and downtime.
What should a floor fitter charge per day?
There is no single fair rate for every floor fitter. Use this calculator to cover your own pay, costs and paid days, then check the job conditions. Measuring, lifting old flooring, preparation and awkward rooms can all change the time needed. Region matters too; the coming survey will add local context.
Should I charge per day or per m²?
Use a day rate when preparation or access makes the time uncertain. A rate per m² can suit a clearly measured job with a known scope. Divide your day rate by the area you can realistically finish per paid day, and price extra tasks separately.
How much should I mark up materials?
Choose a markup that covers ordering, handling, waste and the risk you carry. There is no universal percentage in this tool. Markup adds a percentage to cost; margin measures profit as a percentage of the selling price, so they are not interchangeable.
Do I charge VAT on materials?
If you are VAT registered, materials supplied as part of your work normally follow the VAT treatment of that supply. The standard rate is 20%, but some building work has different rules. If you are not registered, do not add VAT as a separate tax charge.
How does CIS affect what I get paid?
CIS rates are 20% registered, 30% unregistered and 0% with gross payment status. Apply the rate to your price ex VAT minus the direct materials cost you paid, without markup; travel, waste, extras, contingency and markup remain included. CIS is advance tax, not a discount. A contractor may treat some costs differently, so check your CIS statement.
How do I charge for travel?
Allow for routine van and fuel costs in your annual business budget. For a distant job, agree any extra travel time, mileage, parking or accommodation in the quote. Avoid charging twice for the same allowance, and remember travel fuel is not excluded from CIS deductions.
What is a fair half day rate?
This calculator uses 55% of the full day rate for a half day. That allows something towards travel and setup when two short jobs may not fit into one day. It is a pricing assumption, not a legal rule or a market benchmark.
Put the agreed scope in a quote template, record completed work with job sheets, and use the survey to tell us what would help next.
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