McElhatton was born in 1963 in Terenure, a suburb in the south of Dublin, to a modest family. He began studying acting at Terenure College, a school known for its drama tradition, and afterward spent eight years in London where he graduated from the Royal Academy of Dramatic Art in 1987. McElhatton returned to Ireland in the early nineties, where he began his acting career mainly in theatre and television. He appeared in a short film titled The Loser in 1990. In 1996, he was directed by John Carney in the film November Afternoon, in which he plays the main character. In the late nineties and early 2000s, McElhatton appeared in numerous series and TV films in Ireland, working with various film Directors, including Paddy Breathnach and Conor McPherson for roles in I Went Down (1997), Saltwater (2000), Blow Dry (2001), and The Actors (2003). Between 2000 and 2002, McElhatton gained fame from appearing in the situation comedies Paths to Freedom and Fergus's Wedding. In addition to acting, he also took on the role of Screenwriter, writing the screenplay for all of the episodes. The character of Rats in Paths to Freedom, which he wrote and starred in, became popular with the public and allowed it to be adapted into an entire feature film in 2003 (Spin the Bottle). As his career went on, McElhatton continued playing minor characters in films by Directors such as Lenny Abrahamson, John Boorman and Kari Skogland. McElhatton also appeared in Perrier's Bounty (2009) and Death of a Superhero (2011).

He returned to his role as Writer in 2010, writing six episodes of the sitcom Your Bad Self . Over the next decade, McElhatton began appearing in much larger roles. In 2011, he had a role in the film Albert Nobbs directed by Rodrigo García, and the following year the short Pentecost , which received a nomination for Best Short Film at the 2012 Academy Awards. That same year he took part in the film Shadow Dancer directed by James Marsh, while also on television in the cast of the miniseries Titanic: Blood and Steel.

In 2012, McElhatton joined the cast of the popular HBO television series Game of Thrones, beginning in the second season, playing the character of Roose Bolton. From the fifth season on he was promoted to series regular. In 2015, he played one of the protagonists in the horror film The Hallow, which was presented at the 2015 Sundance Film Festival.

He appeared in the screen adaptation of the true story of World War II drama 'The Zookeeper's Wife' in 2017.