Do CIS subcontractors pay National Insurance?

Yes, if your profit is over £12,570. In 2026-27 you pay Class 4 National Insurance at 6% up to £50,270 and 2% above, through your tax return. Your contractor takes no separate National Insurance.

A subcontractor under the Construction Industry Scheme (CIS) is self-employed. CIS 340 says the scheme does not apply to employees paid through Pay As You Earn (PAYE), so there is no Class 1 National Insurance taken from your pay as there would be on a wage slip. Your National Insurance is worked out once a year on your profit, which is your gross pay less allowable costs, and most people pay it through Self Assessment.

The 2026-27 rates

These are GOV.UK's figures, checked on 16 October 2026. The Income Tax in the example below uses the rates for outside Scotland, because Scottish Income Tax bands are different.

Where the CIS deduction fits in

The 20% your contractor takes is not just Income Tax. CIS 340 describes a deduction as the amount withheld on account of tax and Class 4 National Insurance. Section 62 of the Finance Act 2004 then sets the order: a deduction paid to HMRC counts as Income Tax paid first, and any excess goes towards your Class 4. HMRC's CIS manual repeats that order at CISR72010.

So you do not pay National Insurance as a separate bill on top of the deduction. Your tax return adds up the Income Tax and Class 4 you owe, takes off everything deducted, and either repays the difference or asks for the balance.

Worked example

Kelly is a labour-only plasterer living outside Scotland, registered for CIS at 20%, with no other income. In 2026-27 she is paid £38,000 gross, spends £6,000 on tools, van costs and other allowable expenses, and so makes £32,000 profit.

Kelly's Class 2 is treated as paid, because her profit is above £7,105.

Now take a quieter year: profit of £6,000. There is no Income Tax and no Class 4, and Class 2 is not treated as paid because profit is under £7,105. Kelly could choose to pay voluntary Class 2; 52 weeks at £3.65 is £189.80.

What this means for you

Outside Scotland, on profit between £12,570 and £50,270, every extra £100 of profit costs £26: £20 of Income Tax and £6 of Class 4. Every £100 of allowable costs you record saves the same £26, so keeping receipts matters as much for National Insurance as for tax.

Above £50,270 the Class 4 rate drops to 2%. On £60,000 of profit, Class 4 is £2,262.00 on the slice from £12,570 to £50,270, plus £194.60 on the £9,730 above it: £2,456.60 in all.

A low-profit year is the one to think about. GOV.UK lists self-employed people with profits under £7,105 among those who may want to pay voluntary contributions, because gaps can affect your State Pension. Voluntary contributions do not always increase it, so check your record and your State Pension forecast first.

Over-deducted CIS is claimed back through your tax return, which you can file from 6 April. Once you are in Making Tax Digital, HMRC adds your CIS deductions to your tax return and any refund is requested separately through HMRC online services.

Steps to work out your National Insurance

1. Add up your gross pay before CIS deductions from your monthly statements.
2. Take off your allowable costs to get your profit.
3. If profit is over £12,570, Class 4 is 6% of the slice up to £50,270, plus 2% of anything above.
4. If profit is under £7,105, check your National Insurance record before deciding on voluntary Class 2.
5. Claim all your CIS deductions on your tax return, so they are set against your Income Tax and then your Class 4.

The self-employed National Insurance calculator works out your Class 4 from your profit. The free MTD check shows when Making Tax Digital starts for you, and the trades section has more for subcontractors.