Hiring someone in Northern Ireland: a payroll guide for Irish employers

You have found the right person for the job. They live in Northern Ireland. Do they go on your Irish payroll?

If they will do all their work in the Republic of Ireland, Irish payroll is normally the starting point. If they will work in Northern Ireland, you need to establish the UK tax and National Insurance arrangements. If they will work in both, you need to review both systems before their first payday.

Their home address is part of the answer. Their actual working pattern is the detail that makes the difference.

Start with where the work will happen

For an ordinary private-sector employee, use this as a starting point:

These are common starting positions, not a determination for directors, temporary postings or employees with unusual residence arrangements. The Ireland–UK tax treaty and separate social security rules govern the detailed outcome.

If they commute from Northern Ireland to work in Ireland

For example, someone living in Newry who works entirely at your Dundalk premises will normally go on your Irish payroll. You calculate Irish PAYE and USC using Revenue’s payroll instructions. Irish PRSI will generally apply where the work is carried out solely in Ireland, unless an exception such as a covered temporary posting applies.

Ask the employee to arrange a PPS number and register their first Irish employment with Revenue where required. You need a Revenue Payroll Notification, or RPN, to apply the correct credits and rate bands. Missing payroll information can lead to emergency tax.

Check their tax credits and UK reporting position

A person resident in the UK whose Irish taxable income is at least 75% of their total worldwide income can qualify for full Irish personal credits, reliefs and deductions. Below that threshold, a proportion may be available, depending on their circumstances. Revenue’s non-resident tax credit guidance explains the rules.

A UK-resident employee may also need to report the earnings to HMRC and claim relief for Irish tax. The credit is limited, so an Irish payroll deduction does not prove there will be no further UK tax. Encourage the employee to check their own filing requirements early. HMRC explains the limits on foreign tax credits.

Include pensions in the setup

Check the employee’s MyFutureFund position. The main automatic-enrolment criteria are age 23 to 60, the €20,000 annual earnings threshold and no qualifying pension arrangement recorded through payroll. NAERSA assesses eligibility using payroll information; follow the enrolment instructions issued for the employment. The official MyFutureFund site explains how it works.

If the employee will also work from home in Northern Ireland, pause here and review that pattern separately. They are then working in two jurisdictions, even if the job and employer remain the same.

If they will live and work in Northern Ireland

UK employment tax and National Insurance need to be considered, but the right collection arrangement is not identical for every Irish employer

Establish the UK payroll arrangement

Whether an overseas employer must operate UK PAYE for income tax depends on factors including its UK presence and whether there is a UK entity for which the employee works. Voluntary PAYE arrangements may also be possible. HMRC’s overseas-employer guidance sets out this distinction.

Before the employee starts, agree who will register, calculate deductions, submit reports and pay HMRC. Do not leave the employee to discover an unexpected filing job after the first payslip.

Confirm the Irish treatment too

For a non-resident employee working outside Ireland, a PAYE Exclusion Order may authorise you to stop deducting Irish income tax and USC. Obtain the appropriate confirmation before changing deductions. Irish-company directors need a separate review, including any treaty modification. See Revenue’s guidance on employment outside Ireland.

Also review the contract, holiday arrangements, minimum pay and statutory payments under the rules applicable in Northern Ireland. The Northern Ireland Department for the Economy provides employment-rights guidance and directs employers to local support.

Ask your accountant whether the role could create a taxable business presence in the UK, particularly where the employee will run operations or negotiate contracts there. That is a separate question from registering payroll.

What to settle before their first payday

1. Work location: record the agreed office, site and home-working pattern.
2. Right to work: complete the appropriate checks. Irish and British citizens have reciprocal working rights under the Common Travel Area; living in either country is not enough on its own for other nationalities.
3. Payroll responsibilities: confirm the registrations and reporting arrangements needed in each jurisdiction.
4. Social insurance: establish whether PRSI or National Insurance applies, and whether a coverage certificate is needed.
5. Pensions and employment terms: assess these alongside the salary, not after it.
6. Currency and payment: agree the currency, payment date, bank details and who bears any conversion costs.

If there is any regular home working across the border, use our remote-working guide before finalising the offer.

Bring the working pattern to the payroll conversation

When you contact Small Business Payroll, tell us where the employee will live, where they will work and whether your business already operates in Northern Ireland. Those details help us discuss the payroll support you need. You can also call 01 234 3788.

General guidance for Irish employers hiring private-sector employees. Obtain advice on the employee’s circumstances and your business arrangements before setting up payroll.