Employing Staff Across the NI–ROI Border: What Dundalk Employers Need to Know in 2026

In January 2026, I shared a note on LinkedIn that cross-border employment in the Dundalk–Newry region was getting “more complex — fast.” The response I got from local employers confirmed what I’d been seeing in practice: a lot of businesses along the border have staff arrangements they’ve never properly reviewed, and the gap between what they’re doing and what they should be doing is widening.

Dundalk sits eight miles from Newry. Thousands of people cross that border every working day to go to work. Hundreds of Dundalk businesses have employees who live in Northern Ireland, or who travel into Northern Ireland to do work, or who work from home on the Northern Ireland side of the border. Each of these situations carries distinct tax, PRSI, and payroll obligations — and since Brexit changed the legal framework in 2021, some arrangements that were straightforward have become significantly more complicated.

This guide covers the main categories of cross-border employment and what each means for a Dundalk employer. It is part of our full library of cross-border articles, which covers everything from VAT to business structuring.

The Three Main Scenarios

Scenario 1: An employee lives in Northern Ireland and commutes daily to work in Dundalk.

This is the classic cross-border worker scenario. The employee is resident in Northern Ireland (UK tax resident) but performs all their duties in the Republic of Ireland. Under the double taxation agreement between Ireland and the UK, employment income is taxed in the country where the duties are performed — in this case, the Republic of Ireland. The employer should operate PAYE, PRSI, and USC in the normal way for an ROI employee.

The employee’s UK tax position is also relevant. As a UK resident, they must declare their Irish employment income to HMRC. However, because the double taxation agreement allocates taxing rights to Ireland, they will generally claim a credit for Irish tax paid against any UK tax liability, or be exempt from UK tax on that income. This is the employee’s responsibility, but it’s worth being aware of as an employer, and it’s worth flagging to employees who may not be aware of their UK obligations.

Scenario 2: An employee lives in the Republic of Ireland and travels to Northern Ireland to work.

Here the reverse applies. The employee is an Irish tax resident but performs duties in Northern Ireland. Tax is due in the UK on the portion of income earned in Northern Ireland. Irish Revenue will tax the worldwide income of an Irish resident, but will allow credit for UK tax paid under the double taxation agreement.

There is a specific relief available for qualifying cross-border workers — the Transborder Workers’ Relief — which can provide Irish income tax exemption on income earned in a foreign employment. Whether this applies depends on the specific employment structure, the number of days worked in each jurisdiction, and other conditions. It is a relief that is frequently available but infrequently claimed.

Scenario 3: An employee works partly in Northern Ireland and partly in the Republic (hybrid or split-duty arrangement).

This is increasingly common and is the most complex scenario. Post-Brexit, the rules around split-duty arrangements have tightened. Revenue and HMRC both need to be considered. The proportion of time spent in each jurisdiction determines the taxing rights. Payroll may need to be split — with PAYE/PRSI operated in Ireland on the ROI portion of earnings, and UK PAYE/NIC on the NI portion.

In some cases, an employer can obtain advance clearance from HMRC to operate PAYE only on the NI proportion of earnings, rather than on 100% of salary. This requires a formal application and is not automatic. Without this clearance, UK PAYE technically applies to 100% of the employee’s earnings, creating a double-PAYE situation that must then be unwound through refund claims.

Remote Working — The Hidden Risk

The issue that has caught the most employers off guard since 2020 is remote working across the border. An employee who lives in Newry and works remotely, five days a week, for a Dundalk company — performing all their duties from the Northern Ireland side of the border — creates a very different tax position to a commuting employee.

Where the employee works exclusively from Northern Ireland, their employment income is treated as UK-source income. Irish PAYE should not apply. The employer may have obligations to register as a UK employer and operate UK PAYE and National Insurance Contributions on that employee’s salary.

Furthermore, if the employee is performing core functions of the Irish business from Northern Ireland — not just administrative tasks, but actual business-generating or business-critical activities — there is a risk that the Irish company has created a “permanent establishment” in the UK, a topic I cover in depth in my article on how to structure a business operating on both sides of the border. A permanent establishment triggers UK corporate tax liability for the Irish company on the profits attributable to that establishment. This is a significant risk that many Irish businesses are unaware they are running.

The threshold for a permanent establishment is not a formal office or lease. An employee habitually concluding contracts, or exercising authority to bind the company, from a home in Newry can be sufficient. Post-Brexit, HMRC is increasingly alert to these arrangements.

PRSI and Social Security

Social security — PRSI in Ireland, National Insurance Contributions in the UK — operates under a separate set of rules from income tax. For employees working in both jurisdictions, the EU Social Security Coordination Regulation (retained in the Ireland-UK context by the Withdrawal Agreement) generally requires that PRSI/NIC is paid in only one jurisdiction.

For a cross-border worker who spends more than 25% of their working time in their country of residence, social security is typically due in the country of residence. For someone living in Northern Ireland who spends more than 25% of their working time there (including remote working days), National Insurance is the applicable contribution — not PRSI.

This has significant cost implications for employers. PRSI rates in Ireland are generally higher than NIC rates at the equivalent salary levels, but the interaction with auto-enrolment (now live in Ireland) and the UK auto-enrolment system (already long-established) adds further complexity.

Getting the social security determination right requires a formal A1 certificate application (for EU workers) or specific advice on the UK-Ireland Social Security Agreement for UK/Ireland cross-border arrangements.

What Dundalk Employers Should Do

If you have any employees who live in Northern Ireland, travel to Northern Ireland for work, or work remotely from Northern Ireland, I would recommend a formal review of your payroll arrangements. The specific questions to answer are:

Where does each employee physically perform their duties, and in what proportions? Are PAYE, PRSI, and USC being operated correctly on each employee? Have you assessed whether any remote-working arrangements create a permanent establishment risk in the UK? Are any employees entitled to claim the Transborder Workers’ Relief? Are your social security determinations correct?

This is not an area where guessing is sufficient. The consequences of getting it wrong — unpaid PAYE to Revenue, penalties from HMRC, social security underpayments, or an unexpected corporate tax liability in the UK — are all real and all avoidable with the right advice.

At Malone & Co., cross-border tax and employment is one of our core areas. We work with businesses on both sides of the border and have been advising on these issues since long before Brexit made them more complicated. If you want a review of your cross-border employment arrangements, get in touch.