diff --git a/src/simplewallet/simplewallet.cpp b/src/simplewallet/simplewallet.cpp
index b05b68e89..7ce51a1f6 100644
--- a/src/simplewallet/simplewallet.cpp
+++ b/src/simplewallet/simplewallet.cpp
@@ -2091,6 +2091,19 @@ bool simple_wallet::set_segregation_height(const std::vector<std::string> &args/
   return true;
 }
 
+bool simple_wallet::set_ignore_fractional_outputs(const std::vector<std::string> &args/* = std::vector<std::string>()*/)
+{
+  const auto pwd_container = get_and_verify_password();
+  if (pwd_container)
+  {
+    parse_bool_and_use(args[1], [&](bool r) {
+      m_wallet->ignore_fractional_outputs(r);
+      m_wallet->rewrite(m_wallet_file, pwd_container->password());
+    });
+  }
+  return true;
+}
+
 bool simple_wallet::help(const std::vector<std::string> &args/* = std::vector<std::string>()*/)
 {
   if(args.empty())
@@ -2478,6 +2491,7 @@ bool simple_wallet::set_variable(const std::vector<std::string> &args)
     const std::pair<size_t, size_t> lookahead = m_wallet->get_subaddress_lookahead();
     success_msg_writer() << "subaddress-lookahead = " << lookahead.first << ":" << lookahead.second;
     success_msg_writer() << "segregation-height = " << m_wallet->segregation_height();
+    success_msg_writer() << "ignore-fractional-outputs = " << m_wallet->ignore_fractional_outputs();
     return true;
   }
   else
@@ -2532,6 +2546,7 @@ bool simple_wallet::set_variable(const std::vector<std::string> &args)
     CHECK_SIMPLE_VARIABLE("key-reuse-mitigation2", set_key_reuse_mitigation2, tr("0 or 1"));
     CHECK_SIMPLE_VARIABLE("subaddress-lookahead", set_subaddress_lookahead, tr("<major>:<minor>"));
     CHECK_SIMPLE_VARIABLE("segregation-height", set_segregation_height, tr("unsigned integer"));
+    CHECK_SIMPLE_VARIABLE("ignore-fractional-outputs", set_ignore_fractional_outputs, tr("0 or 1"));
   }
   fail_msg_writer() << tr("set: unrecognized argument(s)");
   return true;
diff --git a/src/simplewallet/simplewallet.h b/src/simplewallet/simplewallet.h
index 7a788d432..1f2765055 100644
--- a/src/simplewallet/simplewallet.h
+++ b/src/simplewallet/simplewallet.h
@@ -137,6 +137,7 @@ namespace cryptonote
     bool set_key_reuse_mitigation2(const std::vector<std::string> &args = std::vector<std::string>());
     bool set_subaddress_lookahead(const std::vector<std::string> &args = std::vector<std::string>());
     bool set_segregation_height(const std::vector<std::string> &args = std::vector<std::string>());
+    bool set_ignore_fractional_outputs(const std::vector<std::string> &args = std::vector<std::string>());
     bool help(const std::vector<std::string> &args = std::vector<std::string>());
     bool start_mining(const std::vector<std::string> &args);
     bool stop_mining(const std::vector<std::string> &args);
diff --git a/src/wallet/wallet2.cpp b/src/wallet/wallet2.cpp
index 35cddcb05..2dea40dd3 100644
--- a/src/wallet/wallet2.cpp
+++ b/src/wallet/wallet2.cpp
@@ -676,6 +676,7 @@ wallet2::wallet2(network_type nettype, bool restricted):
   m_segregate_pre_fork_outputs(true),
   m_key_reuse_mitigation2(true),
   m_segregation_height(0),
+  m_ignore_fractional_outputs(true),
   m_is_initialized(false),
   m_restricted(restricted),
   is_old_file_format(false),
@@ -2800,6 +2801,9 @@ bool wallet2::store_keys(const std::string& keys_file_name, const epee::wipeable
   value2.SetUint(m_segregation_height);
   json.AddMember("segregation_height", value2, json.GetAllocator());
 
+  value2.SetInt(m_ignore_fractional_outputs ? 1 : 0);
+  json.AddMember("ignore_fractional_outputs", value2, json.GetAllocator());
+
   value2.SetUint(m_subaddress_lookahead_major);
   json.AddMember("subaddress_lookahead_major", value2, json.GetAllocator());
 
@@ -2882,6 +2886,7 @@ bool wallet2::load_keys(const std::string& keys_file_name, const epee::wipeable_
     m_segregate_pre_fork_outputs = true;
     m_key_reuse_mitigation2 = true;
     m_segregation_height = 0;
+    m_ignore_fractional_outputs = true;
     m_subaddress_lookahead_major = SUBADDRESS_LOOKAHEAD_MAJOR;
     m_subaddress_lookahead_minor = SUBADDRESS_LOOKAHEAD_MINOR;
     m_key_on_device = false;
@@ -3008,6 +3013,8 @@ bool wallet2::load_keys(const std::string& keys_file_name, const epee::wipeable_
     m_key_reuse_mitigation2 = field_key_reuse_mitigation2;
     GET_FIELD_FROM_JSON_RETURN_ON_ERROR(json, segregation_height, int, Uint, false, 0);
     m_segregation_height = field_segregation_height;
+    GET_FIELD_FROM_JSON_RETURN_ON_ERROR(json, ignore_fractional_outputs, int, Int, false, true);
+    m_ignore_fractional_outputs = field_ignore_fractional_outputs;
     GET_FIELD_FROM_JSON_RETURN_ON_ERROR(json, subaddress_lookahead_major, uint32_t, Uint, false, SUBADDRESS_LOOKAHEAD_MAJOR);
     m_subaddress_lookahead_major = field_subaddress_lookahead_major;
     GET_FIELD_FROM_JSON_RETURN_ON_ERROR(json, subaddress_lookahead_minor, uint32_t, Uint, false, SUBADDRESS_LOOKAHEAD_MINOR);
@@ -7691,12 +7698,24 @@ std::vector<wallet2::pending_tx> wallet2::create_transactions_2(std::vector<cryp
   for (uint32_t i : subaddr_indices)
     LOG_PRINT_L2("Candidate subaddress index for spending: " << i);
 
+  // determine threshold for fractional amount
+  const size_t tx_size_one_ring = estimate_tx_size(use_rct, 1, fake_outs_count, 2, 0, bulletproof);
+  const size_t tx_size_two_rings = estimate_tx_size(use_rct, 2, fake_outs_count, 2, 0, bulletproof);
+  THROW_WALLET_EXCEPTION_IF(tx_size_one_ring > tx_size_two_rings, error::wallet_internal_error, "Estimated tx size with 1 input is larger than with 2 inputs!");
+  const size_t tx_size_per_ring = tx_size_two_rings - tx_size_one_ring;
+  const uint64_t fractional_threshold = (fee_multiplier * fee_per_kb * tx_size_per_ring) / 1024;
+
   // gather all dust and non-dust outputs belonging to specified subaddresses
   size_t num_nondust_outputs = 0;
   size_t num_dust_outputs = 0;
   for (size_t i = 0; i < m_transfers.size(); ++i)
   {
     const transfer_details& td = m_transfers[i];
+    if (m_ignore_fractional_outputs && td.amount() < fractional_threshold)
+    {
+      MDEBUG("Ignoring output " << i << " of amount " << print_money(td.amount()) << " which is below threshold " << print_money(fractional_threshold));
+      continue;
+    }
     if (!td.m_spent && !td.m_key_image_partial && (use_rct ? true : !td.is_rct()) && is_transfer_unlocked(td) && td.m_subaddr_index.major == subaddr_account && subaddr_indices.count(td.m_subaddr_index.minor) == 1)
     {
       const uint32_t index_minor = td.m_subaddr_index.minor;
diff --git a/src/wallet/wallet2.h b/src/wallet/wallet2.h
index 4d22b6915..1c2ee75dd 100644
--- a/src/wallet/wallet2.h
+++ b/src/wallet/wallet2.h
@@ -925,6 +925,8 @@ namespace tools
     void key_reuse_mitigation2(bool value) { m_key_reuse_mitigation2 = value; }
     uint64_t segregation_height() const { return m_segregation_height; }
     void segregation_height(uint64_t height) { m_segregation_height = height; }
+    bool ignore_fractional_outputs() const { return m_ignore_fractional_outputs; }
+    void ignore_fractional_outputs(bool value) { m_ignore_fractional_outputs = value; }
     bool confirm_non_default_ring_size() const { return m_confirm_non_default_ring_size; }
     void confirm_non_default_ring_size(bool always) { m_confirm_non_default_ring_size = always; }
 
@@ -1284,6 +1286,7 @@ namespace tools
     bool m_segregate_pre_fork_outputs;
     bool m_key_reuse_mitigation2;
     uint64_t m_segregation_height;
+    bool m_ignore_fractional_outputs;
     bool m_is_initialized;
     NodeRPCProxy m_node_rpc_proxy;
     std::unordered_set<crypto::hash> m_scanned_pool_txs[2];