diff --git a/src/cryptonote_config.h b/src/cryptonote_config.h
index 1ac8ab328..fd52f2e87 100644
--- a/src/cryptonote_config.h
+++ b/src/cryptonote_config.h
@@ -57,6 +57,7 @@
 // COIN - number of smallest units in one coin
 #define COIN                                            ((uint64_t)1000000000000) // pow(10, 12)
 #define DEFAULT_FEE                                     ((uint64_t)100000000000) // 5 * pow(10, 11)
+#define FEE_PER_KB                                      ((uint64_t)10000000000) // pow(10, 10)
 
 
 #define ORPHANED_BLOCKS_MAX_COUNT                       100
diff --git a/src/cryptonote_core/tx_pool.cpp b/src/cryptonote_core/tx_pool.cpp
index 81f932014..f623037ee 100644
--- a/src/cryptonote_core/tx_pool.cpp
+++ b/src/cryptonote_core/tx_pool.cpp
@@ -86,9 +86,12 @@ namespace cryptonote
     }
 
     uint64_t fee = inputs_amount - outputs_amount;
-    if (!kept_by_block && fee < DEFAULT_FEE)
+    uint64_t needed_fee = blob_size / 1024;
+    needed_fee += (blob_size % 1024) ? 1 : 0;
+    needed_fee *= FEE_PER_KB;
+    if (!kept_by_block && fee < needed_fee)
     {
-      LOG_PRINT_L1("transaction fee is not enough: " << print_money(fee) << ", minumim fee: " << print_money(DEFAULT_FEE));
+      LOG_PRINT_L1("transaction fee is not enough: " << print_money(fee) << ", minumim fee: " << print_money(needed_fee));
       tvc.m_verifivation_failed = true;
       return false;
     }
diff --git a/src/wallet/wallet2.cpp b/src/wallet/wallet2.cpp
index 5af9a71bd..31345879b 100644
--- a/src/wallet/wallet2.cpp
+++ b/src/wallet/wallet2.cpp
@@ -954,7 +954,22 @@ std::vector<wallet2::pending_tx> wallet2::create_transactions(std::vector<crypto
       {
         cryptonote::transaction tx;
         pending_tx ptx;
-        transfer(dst_vector, fake_outs_count, unlock_time, fee, extra, tx, ptx);
+
+	// loop until fee is met without increasing tx size to next KB boundary.
+	uint64_t needed_fee = 0;
+	do
+	{
+	  transfer(dst_vector, fake_outs_count, unlock_time, fee, extra, tx, ptx);
+	  auto txBlob = t_serializable_object_to_blob(ptx.tx);
+	  uint64_t txSize = txBlob.size();
+	  uint64_t numKB = txSize / 1024;
+	  if (txSize % 1024)
+	  {
+	    numKB++;
+	  }
+	  needed_fee = numKB * FEE_PER_KB;
+	} while (ptx.fee < needed_fee);
+
         ptx_vector.push_back(ptx);
 
         // mark transfers to be used as "spent"