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.