diff --git a/erpnext/hooks.py b/erpnext/hooks.py
index c99ae7da5e..b301074e11 100644
--- a/erpnext/hooks.py
+++ b/erpnext/hooks.py
@@ -264,6 +264,11 @@ doc_events = {
 	}
 }
 
+# On cancel event Payment Entry will be exempted and all linked submittable doctype will get cancelled.
+auto_cancel_exempt_doctypes = [
+	"Payment Entry"
+]
+
 scheduler_events = {
 	"all": [
 		"erpnext.projects.doctype.project.project.project_status_update_reminder"