The CITB Levy Explained for Small Contractors

The CITB levy confuses more small contractors than any other piece of construction paperwork. Who has to register, who actually pays, and what you get back are three different questions, and mixing them up costs firms money in both directions: levy paid that need not have been, and grants never claimed. Here is the plain English version.

Figures checked on CITB's website in July 2026.

Who has to register

If your business is wholly or mainly engaged in construction industry activities, you are required to register with CITB and send in a Levy Return every year. Registering is not the same as paying. The return is how CITB works out whether you owe anything at all, and for a lot of small firms the answer is nothing. Skipping the return is the mistake to avoid, because CITB grants are only open to employers whose Levy Returns are up to date. If you are not sure whether your work counts as mainly construction, CITB's levy pages set out the scope.

The rates: what the levy costs

Under the 2026 Levy Order there are two rates. You pay 0.35% of your PAYE payroll, plus 1.25% of payments to subcontractors you pay net of tax under CIS. Both figures are set out on CITB's page on what you pay and why. Notice that the CIS rate is a lot higher than the PAYE rate, so how you engage your labour changes the size of the bill. Two firms with the same turnover can owe very different amounts depending on how much of their workforce is net paid CIS.

Small firm exemption and the half rate

This is where most readers of this guide will land. If your total wage bill is under £150,000, you are exempt: no levy to pay, although the return still has to go in. If your wage bill is between £150,000 and £499,999, you get a 50% reduction on the levy due. Both thresholds are on the same CITB page. A word of caution: older articles still quote the lower thresholds from previous levy orders. Those are out of date, so always check the current figures on CITB's own site rather than a blog from three years ago.

Work out your own bill in two minutes

You do not need to guess where you fall. CITB's levy calculator gives you an estimate from your payroll and CIS figures before the return goes in. If cash flow is tight, knowing the number early beats a surprise invoice later in the year.

New on the 2026 return: Boxes G and H

The 2026 Levy Return adds Section 3b, Boxes G and H, where you declare payments made to labour agencies, umbrella companies and CIS payroll providers. CITB states the information is collected for research purposes only and does not affect the levy you pay, so they are declarations, not new charges. The guidance is in CITB's notes on filling in your Levy Return.

The payoff: registered employers can claim, even with a nil bill

Here is the part small contractors miss. Grants are open to all CITB registered employers whose Levy Returns are up to date, whether or not they pay any levy. That is CITB's own position, set out on its grants scheme page. In other words, a firm under the exemption threshold that files its return on time can claim the same grants as a firm paying thousands.

Two routes matter most for small firms. NVQs from Level 2 to 6 attract a £600 grant on achievement, per CITB's short qualification grant page, and there is no restriction on where you book the course, so CourseGenie's NVQ range qualifies. Health and safety courses such as SMSTS are part funded through Employer Networks instead, at fixed rates and only when booked through CITB's Employer Network Booking Team; the courses on CourseGenie are delivered by a CITB registered training provider that accepts Employer Network bookings, so the funded route stays open on the same courses if we arrange it for you. Our guides to SMSTS and SSSTS funding and Employer Networks cover both routes in detail.

Common questions

I only employ two people. Do I still have to register? If the business is mainly construction, yes. With a small wage bill you will almost certainly be under the exemption threshold and pay nothing, but the Levy Return still has to go in each year, and filing it is what keeps you eligible for grants.

Do payments to subcontractors count towards the levy? Payments to CIS subcontractors you pay net of tax are levied at the CIS rate covered above. That is why two firms with the same headcount can have very different levy bills.

Will the new Boxes G and H put my levy up? No. CITB states the information is collected for research purposes only and has no effect on the levy you pay.

Registered and up to date? Put it to work. Browse NVQs that carry the grant covered above, compare live SMSTS dates and prices, or request a group quote to train a whole team in one go.