The 42% Tax Trap: Your Saturday Shift Is Paying You £115 — Not £250
Working Saturdays is the default move when you want more money in construction. But once your earnings cross one specific line, every extra hour you graft delivers less than half of what you think it does. And HMRC sends the bill in January.
You're already past your regular week. It's Saturday morning, you're on site, and the gross is £250 for the day. That's what goes on the invoice. That's the number you drive home thinking about.
But here's what actually happens to that £250 if your earnings have crossed the £50,270 higher-rate threshold: Income Tax jumps to 40%. Class 4 National Insurance adds another 2%. Combined with travel costs, you're left with £115. You worked your Saturday for less than half the figure you quoted.
The 20% CIS your contractor deducted at source didn't cover it. It never does above the threshold. CIS is a deposit — not your final bill. The balance arrives in January, and most subcontractors don't see it coming.
The Marginal Rate Reality
What happens to your money once you cross £50,270
The Saturday Shift Breakdown: £250 on the Invoice
Here is exactly where that money goes once you're in the higher-rate band:
That's 46p in every pound. The rest goes to HMRC, your tank, and the van. And that's before wear on tools, lunch, or the unpaid hour getting ready and driving back.
Why January Hits Harder Than Expected
Most CIS subcontractors assume their 20% deduction is roughly covering their tax liability. Below the higher-rate threshold, it often does — sometimes generously, which is why many people expect a refund. But once you're regularly pushing past £50,270, that gap between the 20% already deducted and the 42% actually owed builds up quietly across the year.
Karol earns £48,000 from regular Mon–Fri work. He picks up Saturday shifts through October–December, adding £6,000 gross to his year.
- CIS already deducted on that £6,000: £1,200 (20%)
- Actual tax & NI owed on that £6,000: £2,520 (42%)
- Balance owed to HMRC in January: £1,320
Karol expected a CIS refund in January. Instead he owes £1,320 — plus the balance on his regular income if he's been under-deducted elsewhere. Three months of Saturdays to pay a tax bill he didn't budget for.
Four Things to Do Before Your Next Saturday
Know where you stand relative to £50,270 at all times. Once you're within £5,000 of the threshold, your decision-making should change. A simple spreadsheet or your accountant's bookkeeping software does this automatically.
If you're in the 40% band, your Saturday day rate needs to be higher than your weekday rate — not the same or less. If you need £200 net, you need to invoice closer to £350 gross above the threshold. Price the job on the net figure you actually want, not the gross you habitually quote.
Tools, equipment, mileage, workwear, and professional fees all reduce your taxable profit — and every pound you bring back below £50,270 saves you 42p rather than 28p. This is the highest-value use of your deductions. Don't leave receipts unclaimed in the higher-rate band.
If you're consistently above the threshold, put aside 42% of any additional income in a separate account rather than relying on CIS deductions to cover you. When January arrives, the money is already there.
When Extra Work Is Still Worth It
None of this means you should stop working Saturdays. It means you should stop deciding based on the gross figure. At 42% combined, extra work above the threshold still leaves you 58p in every pound — it's just not the near-full rate you're used to below it.
The calculation that matters is: does the net figure, after tax, NI, and costs, justify the time? For some jobs it does. For others — low-rate fill-in work, jobs with high travel costs, work that could push you toward burnout during busy contract periods — it doesn't. Knowing the number before you commit is the difference between a good Saturday and one you regret in January.
Stop guessing your January bill
If you're consistently working above £50,270 and relying on CIS deductions to cover your liability, there's a good chance you're building up a debt you don't know about. A tax efficiency review takes your actual numbers and tells you exactly where you stand.
Get a Tax Efficiency Review →Frequently Asked Questions
The 42% threshold · CIS subcontractors · UK 2026
What is the higher rate tax threshold for 2026/27 and how does it affect CIS subcontractors?
The higher rate Income Tax threshold for 2026/27 is £50,270. Once your taxable profit exceeds this figure, you pay 40% Income Tax (up from 20%) plus 2% Class 4 National Insurance on every pound above the line — a combined marginal rate of 42%. For CIS subcontractors, the 20% deduction at source does not cover this rate, meaning you will owe additional tax via Self Assessment in January. Subcontractors who push past this threshold through overtime or extra shifts often receive an unexpected bill rather than the refund they anticipated.
Does my 20% CIS deduction cover me for higher rate tax?
No. The 20% CIS deduction is a deposit toward your eventual tax liability — not a final settlement. Below the £50,270 threshold, it often over-covers you, which is why many subcontractors receive a refund. Above the threshold, the 20% deduction leaves a 22% gap (40% tax + 2% NI minus the 20% already paid). That shortfall is collected through Self Assessment, due by 31 January following the end of the tax year. Subcontractors working heavily above the threshold should set aside additional funds monthly rather than assuming the CIS deduction covers them.
How do I calculate my real take-home pay above the higher rate threshold?
For any income above £50,270, apply a 42% combined deduction (40% Income Tax + 2% Class 4 NI) to the gross figure, then subtract any job-specific costs such as fuel, tools, or materials you've supplied. For example: a £250 gross Saturday shift, minus £105 in tax and NI, minus £30 in fuel, leaves a true take-home of approximately £115. This net figure — not the gross — is what you should use when deciding whether a job, shift, or contract is financially worthwhile.
What expenses can I claim to reduce my income below the £50,270 threshold?
As a CIS subcontractor, you can deduct the following from your taxable profit: tools and equipment (purchase and replacement); mileage at 45p per mile for the first 10,000 miles, 25p thereafter; workwear and PPE (safety boots, hi-vis, overalls); phone costs used for work; accountancy fees; and training directly relevant to your current trade. These deductions are worth more in the higher-rate band — each pound of deduction saves 42p rather than 28p. Claiming them consistently and correctly can make the difference between crossing the threshold or staying below it.
Should I stop working overtime if I'm in the 40% tax band?
Not necessarily — but the decision should be based on your net figure, not your gross. At 42% combined tax and NI, you keep 58p of every additional pound, which is still a meaningful return. The question is whether the net take-home, after tax and any job-specific costs, justifies the time and effort. For high-rate work with low travel costs, overtime in the 40% band is often still financially worthwhile. For low-rate fill-in work with significant travel, the numbers frequently don't add up. Calculate the net before you commit — not after the invoice is sent.