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What is NY Paid Family Leave and how is it tracked in payroll?

New York Paid Family Leave is a state-mandated program that provides eligible employees with paid time off to bond with a new child, care for a family member with a serious health condition, or assist loved ones when a family member is called to active military service. Nearly every private employer in New York is required to carry PFL coverage, regardless of how many people they employ.

The program is funded entirely by employee payroll deductions. Employers do not contribute to PFL. Each year the state sets a deduction rate and a maximum weekly wage cap. For 2024 the rate was approximately 0.373% of an employee’s gross wages, capped at the state average weekly wage. The exact numbers change annually, so you need to check the New York Workers’ Compensation Board website at the start of each year and update your payroll accordingly.

In your payroll system, PFL should appear as its own separate deduction line on every pay stub. It does not get lumped in with state income tax, disability insurance, or any other withholding. QuickBooks Online and most payroll platforms have a dedicated field for NY PFL. If you are setting up payroll for the first time or switching providers, make sure this line item is configured correctly from the start. Missing it or combining it with another deduction creates problems when it is time to remit.

Unlike state taxes that go to the Department of Taxation and Finance, PFL deductions get remitted to your PFL insurance carrier. Most employers obtain PFL coverage through their existing disability insurance provider or through the State Insurance Fund. The carrier and your remittance schedule depend on your policy, so confirm that with your insurer when you set up coverage.

A few common mistakes to watch for. Some employers forget to begin withholding from new hires on their first day. Others fail to update the deduction rate at the start of a new calendar year, which means they either over-collect or under-collect for the first few pay periods. Both create reconciliation headaches later. If you have employees who earn above the weekly wage cap, you also need to make sure payroll stops deducting once the cap is reached for that period.

For Bronx bookkeepers working with small businesses, PFL questions come up constantly because the program is unique to New York and the rules are not always intuitive. The withholding is small on each paycheck, but tracking it accurately matters for compliance and for making sure employees receive their full benefit when they file a claim.

If you are running payroll in-house and are not confident your PFL deductions are set up correctly, getting professional help early prevents bigger issues down the road. Full-service payroll that accounts for all New York-specific requirements including PFL, disability insurance, and the various city and state tax filings takes the guesswork out of staying compliant.

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More Questions

Should a NYC med spa track services separately from product sales?

Yes. Med spa services and retail product sales have different margin profiles and different sales tax treatment in New York City. Separating them in your books gives you accurate margins and keeps your tax reporting clean.

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How do restaurants track comps and voids correctly?

Comps reduce revenue and should be tracked in a contra-revenue account. Voids are pre-ring corrections that should never hit your revenue at all. Your POS system reports both, but daily reconciliation and consistent categorization are what keep your food cost accurate.

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What accounting software works best for a small trucking company?

QuickBooks Online is the best accounting foundation, but it needs a trucking-specific layer on top for IFTA reporting, per-load profitability, and driver settlements. QBO alone leaves too many gaps for a trucking operation.

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How do NYC property management companies handle owner funds vs operating funds?

Rents and other owner funds must be held in a separate trust or escrow account, tracked per property. Management fees and operating income go to your company operating account. New York regulators treat commingling as a serious violation.

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How do I categorize vendor payments in QuickBooks?

Use the two-step process: enter the bill first to record what you owe, then use Pay Bills when you actually send payment. This keeps your accounts payable accurate and gives you a clear picture of outstanding vendor balances.

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What's the 80/20 rule for tipped workers in New York?

If a tipped employee spends more than 20% of their shift on non-tipped side work like prep or cleaning, the employer cannot take the tip credit for that time. The worker must be paid full minimum wage for those hours.

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M&H Accounting Services is a Bronx-based firm offering bookkeeping, payroll, and advisory services for small businesses across the Bronx, Westchester County, and all five boroughs. Led by Poly Fatima, who brings corporate accounting experience along with a master's in accounting and years of hands-on small business bookkeeping experience to every client she works with.

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