diff --git a/erpnext/loan_management/doctype/loan_repayment/loan_repayment.py b/erpnext/loan_management/doctype/loan_repayment/loan_repayment.py
index 48086dde93f..f0e113b0e7b 100644
--- a/erpnext/loan_management/doctype/loan_repayment/loan_repayment.py
+++ b/erpnext/loan_management/doctype/loan_repayment/loan_repayment.py
@@ -408,6 +408,16 @@ class LoanRepayment(AccountsController):
 		else:
 			payment_account = self.payment_account
 
+		payment_party_type = ""
+		payment_party = ""
+
+		if (
+			hasattr(self, "process_payroll_accounting_entry_based_on_employee")
+			and self.process_payroll_accounting_entry_based_on_employee
+		):
+			payment_party_type = "Employee"
+			payment_party = self.applicant
+
 		if self.total_penalty_paid:
 			gle_map.append(
 				self.get_gl_dict(
@@ -455,6 +465,8 @@ class LoanRepayment(AccountsController):
 					"remarks": _(remarks),
 					"cost_center": self.cost_center,
 					"posting_date": getdate(self.posting_date),
+					"party_type": payment_party_type,
+					"party": payment_party,
 				}
 			)
 		)
@@ -493,6 +505,7 @@ def create_repayment_entry(
 	amount_paid,
 	penalty_amount=None,
 	payroll_payable_account=None,
+	process_payroll_accounting_entry_based_on_employee=0,
 ):
 
 	lr = frappe.get_doc(
@@ -509,6 +522,7 @@ def create_repayment_entry(
 			"amount_paid": amount_paid,
 			"loan_type": loan_type,
 			"payroll_payable_account": payroll_payable_account,
+			"process_payroll_accounting_entry_based_on_employee": process_payroll_accounting_entry_based_on_employee,
 		}
 	).insert()