How much tax does a self-employed labourer pay?

In 2026-27, a self-employed labourer pays 20% Income Tax and 6% Class 4 National Insurance on profit above £12,570. Contractors take 20% of your pay under CIS, or 30% if you are unregistered, towards that bill.

If you supply your time and perhaps your own tools, but no materials, the Construction Industry Scheme (CIS) treats you as a labour-only subcontractor. That shapes your tax in two ways. The CIS deduction comes off nearly everything you invoice, and if your costs are small, your profit sits close to your pay. This page follows GOV.UK's rates and CIS guidance and HMRC's CIS, Employment Status and Business Income manuals, all checked on 17 October 2026.

How CIS works for a labourer

HMRC's CIS manual says a labour-only subcontractor can still be asked to bring their own tools. Contractors do not take the deduction from VAT, consumable stores, hired plant or materials you paid for. If none of those are on your invoice, the 20% or 30% comes off the whole amount.

Each month the contractor must give you a payment and deduction statement within 14 days of the end of the tax month. Keep every one. GOV.UK says the deductions are advance payments towards your tax and National Insurance, and your tax return settles the difference after the year ends.

The 2026-27 rates

These are GOV.UK's figures outside Scotland, where Income Tax bands differ. Higher earners pay 40% and 2% above £50,270, which our guide to how much tax a CIS subcontractor pays works through.

Two worked examples

Both labourers are hypothetical sole traders, registered for CIS at 20%, living outside Scotland, with no other income and the full personal allowance.

The part-year labourer. Profit of £9,000 is under the £12,570 personal allowance, so there is no Income Tax or Class 4. It is over £7,105, so Class 2 is treated as paid, which GOV.UK says protects your National Insurance record. Everything deducted comes back.

The full-year labourer. £25,500 less £12,570 leaves £12,930. Income Tax at 20% is £2,586.00 and Class 4 at 6% is £775.80. CIS took £5,600, so £2,238.20 was overpaid.

Costs a labourer can usually claim

• Travel to temporary sites. GOV.UK does not allow travel between home and work. But HMRC's manual says a trader who works from home at a series of temporary sites can claim travel between home and those sites. In 2026-27 the flat rate for a car or van is 55p a mile for the first 10,000 business miles and 25p after. See travel from home to site.
• Protective clothing. Safety boots, hard hats and overalls you only wear for work, but not everyday clothes. See work clothes and PPE.
• Tools and equipment you buy and use in the business.

Can a labourer be self-employed?

Yes, but it depends on how the job really runs. HMRC's Employment Status Manual uses labourers as its example. A general labourer working full-time or nearly full-time for one contractor over the long term is likely to be an employee where pay is by the hour, day, week or month, the contractor controls what, when, where and how the work is done, personal service is required and the contractor supplies everything but small tools.

Short jobs do not change that by themselves. The manual says an unskilled worker paid by the hour and told what to do is closer to casual employment. Pointers the other way include supplying substantial equipment, real financial risk, and, for a skilled worker paid to complete a specific task, a business-like pattern of working for several different contractors. If you are really an employee, PAYE applies instead of CIS. See employed or self-employed.

What this means for you

If your profit stays in the basic rate band, the 20% taken from your pay is likely to be more than your bill, as in both examples. The overpayment only comes back once you file your tax return, so the sooner after 5 April you file, the sooner HMRC can repay you. Being taken at 30% does not cost you more tax in the end, but it means more of your money waits until then.

Steps to work out your own tax

1. Check you are registered for CIS, so contractors take 20% rather than 30%.
2. Add up your pay before deductions from your monthly statements.
3. Add up your costs, keeping receipts and a record of business miles.
4. Take costs from pay to get your profit, then take off £12,570.
5. Apply 20% Income Tax and 6% Class 4 to what is left, up to £50,270 of profit.
6. Compare the total with your CIS deductions. Our CIS refund estimator does the sums.

Use the free MTD check to see when Making Tax Digital starts for you, and the trades section has more guides on CIS.