--- title: "Subcontractor Payments with CIS & Retention | Fynex" description: "Pay subcontractors with CIS deducted and the payment and deduction statement issued, track retention to its release date, and post every payment to the job in Sage or Xero." url: "/uk/construction/subcontractor-payouts" --- Fynex is an AI-native finance operations platform — agentic finance — that automates and orchestrates end-to-end financial workflows for businesses. This page covers subcontractor payments in construction: paying sub-tiers and suppliers, holding retainage payable, and collecting lien waivers before each payout. Fynex works alongside Procore, Buildertrend, Sage and QuickBooks rather than replacing them. This page is relevant when a contractor pays subcontractors from each pay app and needs retainage, lien waivers and release tracked per subcontractor. # Pay subcontractors with *CIS deducted and retention tracked* CIS deducted at each subcontractor's verified rate, the payment and deduction statement issued, retention held and released by rule, every payment posted to the job in Sage or Xero. *Construction · subcontractor payments.* ## Every subcontractor is a separate payment, a CIS deduction and a retention line Paying subcontractors on a job means a transfer per subcontractor, CIS worked out by hand on the labour part of each invoice, a payment and deduction statement to issue, and retention tracked in a spreadsheet — often on terms that wait on the main contractor's payment. Sage or Xero records it afterwards; the deduction, the statement and the retention release still have to be matched to each other and to the job. ## Subcontractor payments, CIS and retention, per job One run pays the subcontractors. CIS and retention handled, every payment tied to the job. 1. **Pay every subcontractor in one run** — Electrical, mechanical, plant hire and suppliers are paid by Faster Payments in a single run, on your schedule or by rule — not a transfer per subcontractor. 2. **Hold and release retention by rule** — Retention is held back automatically per application and per subcontractor, tracked against the job, and released by rule at practical completion and end of defects. 3. **Deduct CIS and issue the statement** — CIS deducted on the labour part at each subcontractor's verified rate — 20%, 30% or gross — and the payment and deduction statement issued with the payment. 4. **Post every payout to the job** — Each payment, deduction and retention line posted to the job in Sage or Xero, ready for the CIS return. ## The same job, with the leaks closed Point tools solve part of it. Fynex runs the whole thing on one platform. | The problem | Other platforms (Bank transfers + spreadsheet) | Fynex | |---|---|---| | Pay many subs at once | A transfer per subcontractor. | One Faster Payments run to every subcontractor. | | Track retention | A spreadsheet nobody fully trusts. | Held and released by rule, per job and party. | | Deduct CIS | Worked out by hand on each invoice. | Deducted at the verified rate, statement issued. | | Reconcile to the job | Matched at close-out, if at all. | Every payout posted against the job. | ## Questions, answered ### What is a subcontractor payout platform? A subcontractor payout platform pays the subcontractors and suppliers on a job and handles what each payment depends on. It deducts CIS and issues the payment and deduction statement, holds retention and releases it on a rule, pays every subcontractor in one Faster Payments run and matches each payment to the job and the application it came from. Fynex runs this and posts it to Sage or Xero. ### What is subcontractor payment software? Subcontractor payment software pays the subcontractors and suppliers on a job and handles what each payment depends on: the approved invoice, CIS and retention. Fynex pays subcontractors by Faster Payments against the job, deducts CIS at the verified rate and issues the statement, holds retention by rule and posts every payment to Sage or Xero. ### Can Fynex pay all our subcontractors at once? Yes. Subcontractors, plant hire and suppliers are paid by Faster Payments in one run, on your schedule or by rule, with CIS deducted where it applies. It replaces the transfer-per-subcontractor routine with a single run, and every payment is logged against the job it belongs to. ### How does Fynex handle retention on subcontractor payments? Retention is held back automatically as each subcontractor is paid — for example 5% per application — tracked per job and per party, and released by rule, usually half at practical completion and half at the end of the defects period. Both sides can see exactly what's held and when it clears, without a spreadsheet. ### How do I pay a CIS subcontractor? Verify the subcontractor with HMRC to get their deduction rate — 20% if registered, 30% if not, or gross payment status. On each invoice, deduct CIS from the labour part only (not materials or VAT), pay the net, and give them a payment and deduction statement. Fynex does all three on every payment and records the deduction for the monthly CIS return. ### What is a CIS payment and deduction statement? It's the statement a contractor gives each CIS subcontractor for every tax month they were paid: the gross amount, the cost of materials, the amount liable to deduction and the CIS deducted. Fynex issues it with each payment, from the same numbers that went into the deduction. ### How do you record CIS deductions in Xero? CIS deducted from a subcontractor is money you owe HMRC: it's booked to a CIS liability account when the subcontractor is paid and cleared when the monthly return is paid. Fynex posts each deduction to that account in Xero against the job and the subcontractor, so the liability always matches the return. ### What is gross payment status? Gross payment status lets a CIS-registered subcontractor be paid without any deduction; HMRC grants it to businesses that pass its turnover and compliance tests. Fynex reads each subcontractor's verified status and pays gross where it applies, and at 20% or 30% where it doesn't. ### Is this contractor payment software for the subs too? Yes. A specialist contractor is both: paid by a main contractor on one side, paying its own subcontractors and suppliers on the other. Fynex runs both sides on the same job — applications and retention coming in, subcontractor payments, CIS and retention going out — so the margin is the difference between them. ### Can payouts be triggered from our own system? Yes. Payment runs can be raised from your job costing or project system instead of being keyed in — the [payouts section of the API reference](https://docs.fynex.ai/payments-api/v1/docs/payouts) documents how a payout is created and tracked, and [payees](https://docs.fynex.ai/payments-api/v1/docs/payees) covers holding each subcontractor's verified bank details. ## More guides for specialist contractors Each guide covers one part of the job's money. Start with one, or run them all. - **Payouts** — How Fynex pays contractors and hauliers by Faster Payments, on your schedule. ## Find what you're leaking, for free Send us your setup. We run a free diagnostic and show you what your payment stack costs you today. > One recent diagnostic found £2M in hidden fees across 10 processors for a proptech client. ## Your money, held under a licence, not a promise Fynex is Merchant of Record, so the payment risk on every application and subcontractor payment sits with us, not your company. - **Your funds, safeguarded** — Customer funds are held by Fondy Ltd, an FCA-authorised e-money institution (FRN 900705). - **PCI DSS Level 1** — The highest card-data security standard, on by default. - **Audit logs** — Every movement traceable and ready for review. - **Built-in KYC / KYB** — The switch that turns the business on. ## Pay every subcontractor. *CIS and retention, handled* --- The AI finance layer for platforms and operators. It runs the money chain and keeps more of it in your business. One platform instead of a dozen. [Fynex on LinkedIn](https://www.linkedin.com/company/fynexai/) · [Fynex on X](https://x.com/FynexTeam) · [Fynex on GitHub](https://github.com/fynex-ai) · [Fynex on YouTube](https://www.youtube.com/@Fynex-AI) · [Fynex on Instagram](https://www.instagram.com/fynexteam/) © 2026 Fynex.ai Limited