+34
Work Q&A: How does the Irish public sector typically handle remote working arrangements for Northern Ireland residents?
Work Q&A: How does the Irish public sector typically handle remote working arrangements for Northern Ireland residents? I know that working from home for two or three days a week could potentially trigger cross-Border compliance thresholds around Irish PRSI and UK national insurance.
Illustration: Paul Scott I see some public sector advertisements with policies offering up to three days of remote work per week, which looks fantastic for potential cross-Border workers navigating a commute. However, I know that working from home for two or three days a week could potentially trigger cross-Border compliance thresholds around Irishand UK national insurance.
My understanding is this is to do with the percentage of work that “takes place” in the UK vs the Republic for tax resident purposes. Your work questions answered: I was humiliated and verbally abused by my manager, what rights do I have? My company is clamping down on working from home. Can I reject this change?
For example, are cross-Border staff usually able to avail of the full three days of remote work from home, or does compliance require capping any Northern Ireland based remote working at one day a week to keep everything within the standard Irish PRSI system? Aside from consular staff posted abroad, those residing in Northern Ireland are the only public workers who can avail of remote arrangements outside of the Republic.
However, the exception does not lift underlying compliance restrictions for those living across the Border, which typically result in the number of remote working days being capped at one per week, according to HR and tax experts.
“ merely allows them to access hybrid arrangements under strict limits. The primary compliance bottleneck here is social security legislation,” says Damien McCarthy, founder and chief executive of consultancy firm HR Buddy. A cross-Border worker is subject to the social insurance system of the country where their employer is based, McCarthy says, unless they perform a “substantial part” of their work where they live.
That “substantial part” is legally interpreted as 25 per cent or more of the worker’s overall working time, he says.
“The reality is that working from home in Northern Ireland for two or three days a week equates to 40 to 60 per cent of your working time, so this automatically triggers a shift in your social security jurisdiction from Irish PRSI to UK national insurance contributions,” he says. To prevent breaching the 25 per cent threshold, the number of remote working days for cross-Border public sector employees is typically restricted to one day per week, McCarthy says.
Such employees are typically asked to sign an agreement that remote work will be carried out in the Republic or that their remote working in Northern Ireland will be restricted to one day, he says. Holding an Irish passport or Irish citizenship provides “no leverage or exemption in this scenario”, McCarthy adds. Rachel Dillon, tax partner in EY Ireland’s people advisory services, says cross-Border working arrangements have “grown in popularity” in recent years.
Each employer will typically have their own internal policies governing cross-Border working, she says, though the taxation of such workers is a “complex area” that requires “significant care” from both employers and employees. Should the reader work remotely from Northern Ireland one day per week, Dillon notes they would be contributing to the Irish PRSI rather than the UK national insurance system.
However, while social security matters might be “simplified” in this case, cross-Border workers could experience “cash flow issues from a tax perspective”, she says.
“Working four days per week in Ireland means you are more likely to be tax resident here. If so, your employer must now withhold Irish PAYE on all of your employment income even though the income relating to your UK workday is not taxable,” she says.
In that case, Dillon says such employees must file a tax return in the Republic to claim a refund, unless Revenue agrees to allow their employer to reduce the PAYE withholdings to the income that is ultimately taxable in Ireland.
“You will most likely find that the UK tax on this income is payable in advance of the Irish refund issuing and hence the cash-flow issue,” she says. “Non-compliance can be time-consuming to rectify and can lead to overdue tax, interest and penalties being charged and we would always recommend that professional advice should be sought to ensure compliance by both the employer and employee,” Dillon says.
If you have work-related questions, from how to deal with burnout to running your own business, The Irish Times Work Q&A column is here to help. You can use the form below to submit your question. Please limit your submissions to 400 words or less and please include a phone number. Your name and contact details will be confidential and only be used for verification purposes.
Any details about your employer will also be anonymised. MOST READ‘Everything was bled out’: Publican says he can’t pay cleaner after losing nearly €200,000Friend of teens who died in M9 crash pleads guilty after wrong-way chase on M50GAA ‘just not ready’ for integration, says director general Tom Ryan
Ireland Latest News, Ireland Headlines
Similar News: You can also read news stories similar to this one that we have collected from other news sources.
How much rain will supersized El Niño bring to Ireland this winter?In the News podcast: Impact expected to last until February next year
Read more »
Abbie Larkin helps Palace get off to a winning start on slow weekend for Irish players in WSLOnly four of the 11 Republic of Ireland players in England’s top division started for their clubs on first weekend
Read more »
Heimir Hallgrímsson Talks with Coleman About Staying for Euro 2028Ireland manager Heimir Hallgrímsson meets with former Everton defender Séamus Coleman to discuss his future and the Republic of Ireland's goal to qualify for Euro 2028, which the country will co-host.
Read more »
Joey O’Brien to link up with Republic of Ireland under-17s for pre-World Cup campFormer Shels boss ‘brings unbelievable experience’, says Ireland lead coach John Cotter
Read more »