All About CIS Payroll and Who Needs to Consider It

All About CIS Payroll and Who Needs to Consider It

The government has launched its Construction Industry Scheme or CIS for ease of payments. The CIS payroll refers to the payments that are sent between contractors and subcontractors.

There are now professional CIS payroll service companies that you as a contractor are sure to come across for ease in business.

CIS Payroll

CIS or Construction Industry Scheme payroll is the payment processing done from the contractor to their subcontractors. It can be done in-house if you are adept enough or can be delegated to a 3rd-party payroll company with a specialization in CIS payrolls.

The system is created for ease in compliance with the HMRC requirements. Contractors pay the CIS payroll at the same time as the normal payrolls. You, as a contractor, can be registered to both PAYE and CIS payroll systems for ease in payouts for different staff roles.

Who needs to Think About the CIS Payroll?

If you are working as a contractor or a subcontractor in the construction industry, the CIS payroll is for you. If you are spending more than a million on construction in 3 years, and have sub-contractors working under you, you are a contractor.

If you are working under a contract for the completion of a construction project, then you will be considered a subcontractor.

Who is Covered?

CIS covers the contractors and the subcontractors in the construction industry. You are a contractor if you have several subcontractors working under you or spend more than a million in 3 years.

Roles like architects and surveyors, although a part of the construction industry, are not categorized under subcontractors. You can qualify to be both contractor and subcontractor too if you are working under a contractor but also have some subcontractors of your own.

You can reach out to the dedicated CIS hotline to discover in-depth information about CIS or visit the government website on CIS for the same.

When do I need 3rd-party CIS Payroll?

First, you need to research and establish if you require enrollment in the CIS scheme. The next logical step is to determine if 3rd-party payroll services are necessary or if you can handle the task in-house. You may have a pre-established payroll department that can easily handle the extra workload with some training and upskilling.

What Else to Keep in Mind?

Various legal and financial obligations are covered under the CIS payroll. These are important and must be kept in mind while finalizing the CIS details:

  • Minimum wage
  • Pension contributions
  • Statutory benefits
  • Employment law

The Construction Industry Scheme (CIS) is established to ensure the fulfillment of rights of both the subcontractor and the contractor. If you are working in the construction industry with above-mentioned relationships, you are eligible for the CIS payroll. Whether to handle it in-house or outsourcing it to a 3rd-party organization is completely up to you.

While in-house CIS payroll management may save you some money, outsourcing the task can be more beneficial.

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