diff --git a/hledger-lib/Hledger/Read/Common.hs b/hledger-lib/Hledger/Read/Common.hs
index 4e472a569..18e576a36 100644
--- a/hledger-lib/Hledger/Read/Common.hs
+++ b/hledger-lib/Hledger/Read/Common.hs
@@ -105,6 +105,7 @@ module Hledger.Read.Common (
   bracketeddatetagsp,
 
   -- ** misc
+  doublequotedtextp,
   noncommenttextp,
   noncommenttext1p,
   singlespacedtext1p,
@@ -658,6 +659,11 @@ modifiedaccountnamep = do
 accountnamep :: TextParser m AccountName
 accountnamep = singlespacedtext1p
 
+-- | Parse a single line of possibly empty text enclosed in double quotes.
+doublequotedtextp :: TextParser m Text
+doublequotedtextp = between (char '"') (char '"') $
+  takeWhileP Nothing $ \c -> not $ isNewline c || c == '"'
+
 -- | Parse possibly empty text, including whitespace, 
 -- until a comment start (semicolon) or newline.
 noncommenttextp :: TextParser m T.Text
diff --git a/hledger-lib/Hledger/Read/JournalReader.hs b/hledger-lib/Hledger/Read/JournalReader.hs
index 585a530ef..369b6457f 100644
--- a/hledger-lib/Hledger/Read/JournalReader.hs
+++ b/hledger-lib/Hledger/Read/JournalReader.hs
@@ -629,7 +629,7 @@ payeedirectivep :: JournalParser m ()
 payeedirectivep = do
   string "payee" <?> "payee directive"
   lift skipNonNewlineSpaces1
-  payee <- lift $ T.strip <$> noncommenttext1p
+  payee <- lift $ T.strip <$> (try doublequotedtextp <|> noncommenttext1p)
   (comment, tags) <- lift transactioncommentp
   skipMany indentedlinep
   addPayeeDeclaration (payee, comment, tags)
@@ -1134,8 +1134,10 @@ tests_JournalReader = testGroup "JournalReader" [
       }
 
   ,testGroup "payeedirectivep" [
-       testCase "simple"             $ assertParse payeedirectivep "payee foo\n"
+        testCase "simple"             $ assertParse payeedirectivep "payee foo\n"
        ,testCase "with-comment"       $ assertParse payeedirectivep "payee foo ; comment\n"
+       ,testCase "double-quoted"      $ assertParse payeedirectivep "payee \"a b\"\n"
+       ,testCase "empty        "      $ assertParse payeedirectivep "payee \"\"\n"
        ]
 
   ,testCase "tagdirectivep" $ do
diff --git a/hledger/hledger.m4.md b/hledger/hledger.m4.md
index dec421179..1c1e17338 100644
--- a/hledger/hledger.m4.md
+++ b/hledger/hledger.m4.md
@@ -2257,10 +2257,12 @@ in another commodity. See [Value reporting](#value-reporting).
 
 This directive can be used to declare a limited set of payees which may appear in [transaction descriptions](#descriptions).
 The ["payees" check](#check) will report an error if any transaction refers to a payee that has not been declared.
+To declare the empty payee name, use `""`.
 Eg:
 
 ```journal
 payee Whole Foods
+payee ""
 ```
 
 Any indented subdirectives are currently ignored.