What comes off,
and what gets paid over.
The deduction applies to the labour element, not the whole invoice, and deducting from the wrong base is the commonest CIS error there is. Put in the split and it shows both figures. Nothing is sent anywhere.
What this catches
Enter your figures and look at the last line, which shows what the deduction would have been if it had been taken from the whole invoice instead of the labour element. On a job with a material-heavy split that difference is substantial, and it is the commonest CIS error there is.
It runs in both directions. If you are the contractor deducting, over-deducting is your error to correct and your subcontractor's cash you are holding. If you are the subcontractor being deducted from, it is worth checking your last three payment and deduction statements against your own applications rather than assuming the figures are right, because the money comes back slowly through the machinery described in reclaiming CIS deductions.
What else is excluded
Materials the subcontractor supplied are the big one, but they are not the only exclusion. VAT is excluded, which is why the form asks for figures excluding it. Plant hire can be excluded in certain circumstances, as can consumable stores and, where the conditions are met, fuel other than for travelling.
The exclusions are worth reading properly against your own invoices rather than applied from memory, because they are the difference between a correct deduction and a dispute with a subcontractor about their own cash. The scheme is set out in the CIS deductions guide.
Getting the rate right
The rate is not a judgment. It comes from verifying the subcontractor with HMRC before you pay them, and verification returns the rate you must apply: 20% for registered subcontractors, 30% for those who cannot be verified, and nil for those holding gross payment status.
Paying at the wrong rate is the contractor's problem rather than the subcontractor's, which is why verification belongs at onboarding alongside the other checks in vetting a subcontractor.
This is a calculator rather than tax advice, and the treatment of a particular invoice can turn on facts it does not ask about. Settle anything unusual with your accountant.