Deciding between working as a self-employed subcontractor under the Construction Industry Scheme (CIS) versus taking a direct employment PAYE role? Use our CIS vs PAYE calculator to instantly compare your true take-home pay and tax liabilities for the 2026/27 tax year.
Disclaimer: This calculator compares direct tax deductions only to illustrate short-term take-home pay differences. It does not factor in the financial value of PAYE employment rights, such as mandatory employer pension contributions, paid statutory holiday, sick pay, or job security. Individual tax circumstances vary; always seek professional accounting advice.
Employer National Insurance: PAYE employees create additional costs for employers through Employer National Insurance contributions. This is one reason many construction firms prefer engaging subcontractors under CIS instead of direct employment.
Our CIS vs PAYE calculator helps construction workers, subcontractors, and tradespeople compare the real difference in take-home pay between self-employed CIS working and direct PAYE employment. Whether you are deciding between a subcontractor role or a permanent PAYE job, this calculator provides an instant side-by-side comparison using the latest 2026/27 UK tax rates.
Unlike many basic online calculators, this tool compares Income Tax, National Insurance contributions, and allowable business expenses to show how your working arrangement affects your net income. The calculator also highlights the wider financial trade-offs between CIS and PAYE, including employment rights, tax administration responsibilities, and HMRC employment status risks.
This calculator is designed for UK construction industry workers including electricians, plumbers, scaffolders, labourers, carpenters, roofers, decorators, and other subcontractors operating under the Construction Industry Scheme.
The Construction Industry Scheme (CIS) is an HMRC initiative designed to minimise tax evasion within the construction industry. Under the scheme, contractors deduct money from a subcontractor's payments and pass it directly to HMRC.
When comparing CIS to direct PAYE employment, it is vital to look beyond just the final take-home figure. The financial advantage of CIS comes with a significant loss of statutory employment protections.
| Feature | CIS (Self-Employed) | PAYE (Employee) |
|---|---|---|
| Take-Home Pay | Generally higher due to lower NICs and allowable tax-deductible expenses. | Generally lower as taxes are calculated on gross income before expenses. |
| Tax Administration | Must manage own accounts, keep receipts, and file an annual Self Assessment. | Employer handles all tax calculations and deductions automatically. |
| Employment Rights | No rights to paid holiday, sick pay, or mandatory employer pension schemes. | Full statutory rights including minimum 28 days paid leave and sick pay. |
| Financial Security | Variable income; contracts can be terminated at short notice. | Consistent salary, redundancy protections, and notice periods. |
CIS is strictly for self-employed workers who operate within the construction industry or provide services that alter the physical state of a building or structure. It is most beneficial for tradespeople who incur significant out-of-pocket expenses (like tools, fuel, and materials) that can be offset against their tax bill. Common beneficiaries include:
It is illegal to process a worker through CIS simply to save on employer taxes if they are acting like a standard employee. HMRC actively investigates "false self-employment" in the construction industry.
If the contractor dictates exactly how, when, and where you complete your work, HMRC may determine that you are an employee disguised as a subcontractor. True self-employment means you have the autonomy to manage your own schedule and methods.
A genuine CIS subcontractor takes on financial risk (e.g., rectifying bad work at their own cost) and usually has the right to send a substitute to complete the work in their place. If you lack these freedoms, a standard PAYE contract may be legally required.