diff --git a/CHANGELOG.md b/CHANGELOG.md
index 1eac13f..2335404 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -3,6 +3,7 @@
 
 ### New features
 - Drag Ruler can now measure difficult terrain on gridless maps (if the Terrain Ruler module is installed and enabled)
+- Improved the positioning of the labels around the ruler. The labels should now never overlap with the waypoint.
 
 ### Bugfixes
 - Fixed a bug that sometimes measured diagonals incorrectly with the 5/10/5 grid rule
diff --git a/src/foundry_imports.js b/src/foundry_imports.js
index 75759b4..6141fc4 100644
--- a/src/foundry_imports.js
+++ b/src/foundry_imports.js
@@ -1,5 +1,6 @@
 import {highlightMeasurementTerrainRuler, measureDistances} from "./compatibility.js";
 import {getGridPositionFromPixels} from "./foundry_fixes.js";
+import {Line} from "./geometry.js";
 import {getColorForDistance} from "./main.js"
 import {trackRays} from "./movement_tracking.js"
 import {recalculate} from "./socket.js";
@@ -200,7 +201,21 @@ export function measure(destination, {gridSpaces=true, snap=false} = {}) {
 			label.text = text;
 			label.alpha = last ? 1.0 : 0.5;
 			label.visible = true;
-			let labelPosition = cs.ray.project((cs.ray.distance + 50) / cs.ray.distance);
+			let labelPosition = {x: s.ray.x0, y: s.ray.y0};
+			labelPosition.x -= label.width / 2;
+			labelPosition.y -= label.height / 2;
+			const rayLine = Line.fromPoints(s.ray.A, s.ray.B);
+			const rayLabelXHitY = rayLine.calcY(labelPosition.x);
+			let innerDistance;
+			// If ray hits top or bottom side of label
+			if (rayLine.isVertical || rayLabelXHitY < labelPosition.y || rayLabelXHitY > labelPosition.y + label.height)
+				innerDistance = Math.abs((label.height / 2) / Math.sin(s.ray.angle));
+			// If ray hits left or right side of label
+			else
+				innerDistance = Math.abs((label.width / 2) / Math.cos(s.ray.angle));
+			labelPosition = s.ray.project((s.ray.distance + 50 + innerDistance) / s.ray.distance);
+			labelPosition.x -= label.width / 2;
+			labelPosition.y -= label.height / 2;
 			label.position.set(labelPosition.x, labelPosition.y);
 		}
 
diff --git a/src/geometry.js b/src/geometry.js
new file mode 100644
index 0000000..f5ee5ef
--- /dev/null
+++ b/src/geometry.js
@@ -0,0 +1,21 @@
+export class Line {
+	constructor(m, b) {
+		this.m = m;
+		this.b = b;
+	}
+
+	static fromPoints(p1, p2) {
+		// Bring line into y=mx+b form
+		const m = (p1.y - p2.y) / (p1.x - p2.x);
+		const b = p1.y - m * p1.x;
+		return new Line(m, b);
+	}
+
+	get isVertical() {
+		return !isFinite(this.m);
+	}
+
+	calcY(x) {
+		return this.m * x + this.b;
+	}
+}