Introduction: Hospitalisation following community-acquired pneumonia (CAP) among children may cause considerable burden to a family. This study was conducted to determine the financial impact on the parents and risk factors for prolonged hospitalisation. Methods: A prospective, cross-sectional hospital-based study was conducted at the University Malaya Medical Centre (UMMC) among patients aged between 3 months and 12 years old with CAP. Parents were interviewed and medical records were reviewed. Results: A total of 95 patients were enrolled in this study with a median age of 13 months, of whom 52 were boys (54.7%) and 43 were girls (45.3%). The median (IQR) total expenses incurred by the parents was RM546.90 (USD 128.23), which constituted 12.6% of total household income. The median workday loss was 9 (4 – 29) days. Pre-existing chronic illness and underweight were found to be strong predictors of prolonged hospitalisation with odds ratio of 3.97 and 4.5, respectively. Conclusion: CAP resulted in a significant financial burden in terms of loss of productivity and costs incurred by parents.