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Level 1

Paid Parental Leave

Looking for guidance on how to Account for Government Paid Parental Leave.  I worked out how to pay the employee but need help on how to Account for the PPL.  A Google search provides plenty of information from Quickbooks Online software competitors but nothing from Quickbooks.

3 Comments 3
Level 8

Paid Parental Leave

Hello Louis11,


Thanks for your post in the Community!


Let me guide you on how to pay Paid Parental Leave for an employee. Here's how:


Set up pay category for paid parental leave:


  1. Click on the Payroll tab.
  2. Click on Payroll Settings.
  3. Click on Pay Categories.
  4. Check if you have a paid parental leave category, if none set up one by click on Add.
  5. Enter name paid parental leave.
  6. Click on Save.

Next, is add the settings to the employee:


  1. Click on the Employee list.
  2. Click on the employee name.
  3. Click on Pay rates.
  4. Tick box for Show in pay run for Paid parental leave.
  5. Enter number of hours worked.

Then, create the pay run. If the paid parental leave does not show. Click on Actions > Add earnings > select Paid parental leave. Enter hours or days. Click on Save.


That's it. You've now paid employee with paid parental leave category. 


Drop by again in the Community if you have further concerns.

Level 1

Paid Parental Leave

Thanks but as per my question I already know the process to pay the employee.  My question was how to account for the receipt and payment of the funds.  I need advice on how to account for the payment from the government on receipt and payment through Payroll i.e chart of accounts, journals if necessary etc etc.  Or is it just coded as other income and then wages which permanently inflate both these categories.

Level 8

Paid Parental Leave

Hi Louis11,


Thanks for getting back to us. There's a default payroll chart of accounts where the payroll journals are posted when you finalise a pay run. This also allows you to easily match the payroll payments from your bank account once payroll payment is downloaded in QBO.


  1. Go to Payroll and select Payroll Settings.
  2. Go to Chart of Accounts and select Default Accounts.
  3. From here, we'll be able to see the default payroll chart of accounts.

Once you run the regular payroll and payments is downloaded in transactions tab. On the Transactions screen, you'll be able to match the journal entry to the payment made. Make sure to allocate the transaction to the Payroll Clearing account or to the payment account set in the default payroll chart of accounts.


If you need further assistance, I recommend also contacting our Customer Care team through Chat by clicking on the HELP icon and click on Contact Us, enter a few details about your issue and choose Chat or Call. Or use this link:

You can also check this link to learn more about: 



Drop by again in the Community to help you.