diff --git a/src/placementcalculator.js b/src/placementcalculator.js
index a4329abd..48424234 100644
--- a/src/placementcalculator.js
+++ b/src/placementcalculator.js
@@ -38,52 +38,52 @@ function PlacementCalculator() {
 		// calculate the appropriate x and y position in the document
 		switch (placement) {
 			case 'n':
-				coords.set('left', position.left - (tipWidth / 2));
-				coords.set('bottom', session.windowHeight - position.top + offset);
+				coords.set('left', position.left - (tipWidth / 2) - session.positionCompensation.left);
+				coords.set('top', position.top - tipHeight - offset - session.positionCompensation.top);
 				break;
 			case 'e':
-				coords.set('left', position.left + offset);
-				coords.set('top', position.top - (tipHeight / 2));
+				coords.set('left', position.left + offset - session.positionCompensation.left);
+				coords.set('top', position.top - (tipHeight / 2) - session.positionCompensation.top);
 				break;
 			case 's':
-				coords.set('left', position.left - (tipWidth / 2));
-				coords.set('top', position.top + offset);
+				coords.set('left', position.left - (tipWidth / 2) - session.positionCompensation.left);
+				coords.set('top', position.top + offset - session.positionCompensation.top);
 				break;
 			case 'w':
-				coords.set('top', position.top - (tipHeight / 2));
-				coords.set('right', session.windowWidth - position.left + offset);
+				coords.set('top', position.top - (tipHeight / 2) - session.positionCompensation.top);
+				coords.set('right', session.windowWidth - position.left + offset - session.positionCompensation.right);
 				break;
 			case 'nw':
-				coords.set('bottom', session.windowHeight - position.top + offset);
-				coords.set('right', session.windowWidth - position.left - 20);
+				coords.set('top', position.top - tipHeight - offset - session.positionCompensation.top);
+				coords.set('right', session.windowWidth - position.left - session.positionCompensation.right - 20);
 				break;
 			case 'nw-alt':
-				coords.set('left', position.left);
-				coords.set('bottom', session.windowHeight - position.top + offset);
+				coords.set('left', position.left - session.positionCompensation.left);
+				coords.set('top', position.top - tipHeight - offset - session.positionCompensation.top);
 				break;
 			case 'ne':
-				coords.set('left', position.left - 20);
-				coords.set('bottom', session.windowHeight - position.top + offset);
+				coords.set('left', position.left - session.positionCompensation.left - 20);
+				coords.set('top', position.top - tipHeight - offset - session.positionCompensation.top);
 				break;
 			case 'ne-alt':
-				coords.set('bottom', session.windowHeight - position.top + offset);
-				coords.set('right', session.windowWidth - position.left);
+				coords.set('top', position.top - tipHeight - offset - session.positionCompensation.top);
+				coords.set('right', session.windowWidth - position.left - session.positionCompensation.right);
 				break;
 			case 'sw':
-				coords.set('top', position.top + offset);
-				coords.set('right', session.windowWidth - position.left - 20);
+				coords.set('top', position.top + offset - session.positionCompensation.top);
+				coords.set('right', session.windowWidth - position.left - session.positionCompensation.right - 20);
 				break;
 			case 'sw-alt':
-				coords.set('left', position.left);
-				coords.set('top', position.top + offset);
+				coords.set('left', position.left - session.positionCompensation.left);
+				coords.set('top', position.top + offset - session.positionCompensation.top);
 				break;
 			case 'se':
-				coords.set('left', position.left - 20);
-				coords.set('top', position.top + offset);
+				coords.set('left', position.left - session.positionCompensation.left - 20);
+				coords.set('top', position.top + offset - session.positionCompensation.top);
 				break;
 			case 'se-alt':
-				coords.set('top', position.top + offset);
-				coords.set('right', session.windowWidth - position.left);
+				coords.set('top', position.top + offset - session.positionCompensation.top);
+				coords.set('right', session.windowWidth - position.left - session.positionCompensation.right);
 				break;
 		}
 
diff --git a/src/tooltipcontroller.js b/src/tooltipcontroller.js
index 42cdc51e..3a0f4d63 100644
--- a/src/tooltipcontroller.js
+++ b/src/tooltipcontroller.js
@@ -202,8 +202,8 @@ function TooltipController(options) {
 
 			// support mouse-follow and fixed position tips at the same time by
 			// moving the tooltip to the last cursor location after it is hidden
-			coords.set('top', session.currentY + options.offset);
-			coords.set('left', session.currentX + options.offset);
+			coords.set('top', session.currentY + options.offset - session.positionCompensation.top);
+			coords.set('left', session.currentX + options.offset - session.positionCompensation.left);
 			tipElement.css(coords);
 
 			// trigger powerTipClose event
@@ -231,8 +231,8 @@ function TooltipController(options) {
 				collisionCount;
 
 			// grab collisions
-			coords.set('top', session.currentY + options.offset);
-			coords.set('left', session.currentX + options.offset);
+			coords.set('top', session.currentY + options.offset - session.positionCompensation.top);
+			coords.set('left', session.currentX + options.offset - session.positionCompensation.left);
 			collisions = getViewportCollisions(
 				coords,
 				tipWidth,
@@ -246,16 +246,16 @@ function TooltipController(options) {
 					// if there is only one collision (bottom or right) then
 					// simply constrain the tooltip to the view port
 					if (collisions === Collision.right) {
-						coords.set('left', session.windowWidth - tipWidth);
+						coords.set('left', session.windowWidth - tipWidth - session.positionCompensation.left);
 					} else if (collisions === Collision.bottom) {
-						coords.set('top', session.scrollTop + session.windowHeight - tipHeight);
+						coords.set('top', session.scrollTop + session.windowHeight - tipHeight - session.positionCompensation.top);
 					}
 				} else {
 					// if the tooltip has more than one collision then it is
 					// trapped in the corner and should be flipped to get it out
 					// of the users way
-					coords.set('left', session.currentX - tipWidth - options.offset);
-					coords.set('top', session.currentY - tipHeight - options.offset);
+					coords.set('left', session.currentX - tipWidth - options.offset - session.positionCompensation.left);
+					coords.set('top', session.currentY - tipHeight - options.offset - session.positionCompensation.top);
 				}
 			}
 
diff --git a/src/utility.js b/src/utility.js
index c0d92bc0..5cfa1a95 100644
--- a/src/utility.js
+++ b/src/utility.js
@@ -59,6 +59,7 @@ function getViewportDimensions() {
 	session.scrollTop = $window.scrollTop();
 	session.windowWidth = $window.width();
 	session.windowHeight = $window.height();
+	session.positionCompensation = computePositionCompensation(session.windowWidth, session.windowHeight);
 }
 
 /**
@@ -68,6 +69,7 @@ function getViewportDimensions() {
 function trackResize() {
 	session.windowWidth = $window.width();
 	session.windowHeight = $window.height();
+	session.positionCompensation = computePositionCompensation(session.windowWidth, session.windowHeight);
 }
 
 /**
@@ -165,8 +167,10 @@ function getTooltipContent(element) {
  * @return {number} Value with the collision flags.
  */
 function getViewportCollisions(coords, elementWidth, elementHeight) {
-	var viewportTop = session.scrollTop,
-		viewportLeft =  session.scrollLeft,
+	// adjusting viewport even though it might be negative because coords
+	// comparing with are relative to compensated position
+	var viewportTop = session.scrollTop - session.positionCompensation.top,
+		viewportLeft =  session.scrollLeft - session.positionCompensation.left,
 		viewportBottom = viewportTop + session.windowHeight,
 		viewportRight = viewportLeft + session.windowWidth,
 		collisions = Collision.none;
@@ -200,3 +204,41 @@ function countFlags(value) {
 	}
 	return count;
 }
+
+/**
+ * Compute compensating position offsets if body element has non-standard position attribute.
+ * @private
+ * @param {number} windowWidth Window width in pixels.
+ * @param {number} windowHeight Window height in pixels.
+ * @return {Offsets} The top, left, right, bottom offset in pixels
+ */
+function computePositionCompensation(windowWidth, windowHeight) {
+	var bodyWidthWithMargin,
+		bodyHeightWithMargin,
+		offsets,
+		bodyPositionPx;
+
+	switch ($body.css('position')) {
+		case 'absolute':
+		case 'fixed':
+		case 'relative':
+			// jquery offset and position functions return top and left
+			// offset function computes position + margin
+			offsets = $body.offset();
+			bodyPositionPx = $body.position();
+			// because element might be positioned compute right margin using the different between
+			// outerWidth computations and add position offset
+			bodyWidthWithMargin = $body.outerWidth(true);
+			bodyHeightWithMargin = $body.outerHeight(true);
+			// right offset = right margin + body right position
+			offsets.right = (bodyWidthWithMargin - $body.outerWidth() - (offsets.left - bodyPositionPx.left)) + (windowWidth - bodyWidthWithMargin - bodyPositionPx.left);
+			// bottom offset = bottom margin + body bottom position
+			offsets.bottom = (bodyHeightWithMargin - $body.outerHeight() - offsets.top) + (windowHeight - bodyHeightWithMargin - bodyPositionPx.top);
+			break;
+		default:
+			// even though body may have offset, no compensation is required
+			offsets = { top: 0, bottom: 0, left: 0, right: 0 };
+	}
+
+	return offsets;
+}
diff --git a/test/bodyoffset-abs.html b/test/bodyoffset-abs.html
new file mode 100644
index 00000000..62775272
--- /dev/null
+++ b/test/bodyoffset-abs.html
@@ -0,0 +1,78 @@
+<!DOCTYPE html>
+<html lang="en-US">
+<head>
+	<meta charset="utf-8" />
+	<title>PowerTip Test Suite</title>
+
+	<!-- Library Resources -->
+		<script type="text/javascript" src="https://code.jquery.com/jquery-1.12.4.js"></script>
+
+	<!-- PowerTip Core Resources -->
+	<script type="text/javascript" src="../src/core.js"></script>
+	<script type="text/javascript" src="../src/csscoordinates.js"></script>
+	<script type="text/javascript" src="../src/displaycontroller.js"></script>
+	<script type="text/javascript" src="../src/placementcalculator.js"></script>
+	<script type="text/javascript" src="../src/tooltipcontroller.js"></script>
+	<script type="text/javascript" src="../src/utility.js"></script>
+	<link rel="stylesheet" type="text/css" href="../css/jquery.powertip.css" />
+
+	<!-- Unit Test Scripts -->
+	<script type="text/javascript" src="tests-bodyoffset.js"></script>
+
+	<!-- Custom Styles For Test Cases -->
+	<style type="text/css">
+		header, section { margin-bottom: 20px; }
+		section { border: 1px solid #CCC; margin: 20px; padding: 20px; }
+		#powerTip { white-space: normal; }
+		#huge-text div, #huge-text-smart div  { text-align: center; }
+		#huge-text input, #huge-text-smart input { margin: 10px; padding: 10px; }
+		#huge-text .east, #huge-text-smart .east { margin-left: 450px; }
+		#session { position: fixed; right: 10px; top: 10px; font-size: 10px; width: 160px; background-color: #fff; border: 1px solid #ccc; padding: 10px; overflow: hidden; }
+		#session pre { margin: 0; }
+	</style>
+</head>
+<body style="position:absolute; left:50px; right:100px; top:25px; bottom:75px;">
+	<section id="huge-text">
+		<h2>Huge Text</h2>
+		<p>The tooltips for the buttons below have a lot of text. The tooltip div is completely elastic for this demo. The tooltips should be properly placed when they render.</p>
+		<div>
+			<input type="button" class="north-west-alt" value="North West Alt" />
+			<input type="button" class="north-west" value="North West" />
+			<input type="button" class="north" value="North" />
+			<input type="button" class="north-east" value="North East" />
+			<input type="button" class="north-east-alt" value="North East Alt" /><br />
+			<input type="button" class="west" value="West" />
+			<input type="button" class="east" value="East" /><br />
+			<input type="button" class="south-west-alt" value="South West Alt" />
+			<input type="button" class="south-west" value="South West" />
+			<input type="button" class="south" value="South" />
+			<input type="button" class="south-east" value="South East" />
+			<input type="button" class="south-east-alt" value="South East Alt" />
+		</div>
+	</section>
+	<section id="huge-text-smart">
+		<h2>Huge Text with Smart Placement</h2>
+		<p>The tooltips for the buttons below have a lot of text. The tooltip div is completely elastic for this demo. The tooltips should be properly placed when they render.</p>
+		<div>
+			<input type="button" class="north-west-alt" value="North West Alt" />
+			<input type="button" class="north-west" value="North West" />
+			<input type="button" class="north" value="North" />
+			<input type="button" class="north-east" value="North East" />
+			<input type="button" class="north-east-alt" value="North East Alt" /><br />
+			<input type="button" class="west" value="West" />
+			<input type="button" class="east" value="East" /><br />
+			<input type="button" class="south-west-alt" value="South West Alt" />
+			<input type="button" class="south-west" value="South West" />
+			<input type="button" class="south" value="South" />
+			<input type="button" class="south-east" value="South East" />
+			<input type="button" class="south-east-alt" value="South East Alt" />
+		</div>
+	</section>
+	<section id="trapped-mousefollow" data-powertip="This is the tooltip text.&lt;br /&gt;It is tall so you can test the padding.">
+		<h2>Trapped mouse following tooltip</h2>
+		<p>This box has a mouse following tooltip.</p>
+		<p>Trap it in the bottom right corner of the viewport. It should flip out of the way. It should not flip if it only hits one edge.</p>
+	</section>
+	<div id="session"><pre /></div>
+</body>
+</html>
diff --git a/test/bodyoffset-rel.html b/test/bodyoffset-rel.html
new file mode 100644
index 00000000..47c58e94
--- /dev/null
+++ b/test/bodyoffset-rel.html
@@ -0,0 +1,78 @@
+<!DOCTYPE html>
+<html lang="en-US">
+<head>
+	<meta charset="utf-8" />
+	<title>PowerTip Test Suite</title>
+
+	<!-- Library Resources -->
+		<script type="text/javascript" src="https://code.jquery.com/jquery-1.12.4.js"></script>
+
+	<!-- PowerTip Core Resources -->
+	<script type="text/javascript" src="../src/core.js"></script>
+	<script type="text/javascript" src="../src/csscoordinates.js"></script>
+	<script type="text/javascript" src="../src/displaycontroller.js"></script>
+	<script type="text/javascript" src="../src/placementcalculator.js"></script>
+	<script type="text/javascript" src="../src/tooltipcontroller.js"></script>
+	<script type="text/javascript" src="../src/utility.js"></script>
+	<link rel="stylesheet" type="text/css" href="../css/jquery.powertip.css" />
+
+	<!-- Unit Test Scripts -->
+	<script type="text/javascript" src="tests-bodyoffset.js"></script>
+
+	<!-- Custom Styles For Test Cases -->
+	<style type="text/css">
+		header, section { margin-bottom: 20px; }
+		section { border: 1px solid #CCC; margin: 20px; padding: 20px; }
+		#powerTip { white-space: normal; }
+		#huge-text div, #huge-text-smart div  { text-align: center; }
+		#huge-text input, #huge-text-smart input { margin: 10px; padding: 10px; }
+		#huge-text .east, #huge-text-smart .east { margin-left: 450px; }
+		#session { position: fixed; right: 10px; top: 10px; font-size: 10px; width: 160px; background-color: #fff; border: 1px solid #ccc; padding: 10px; overflow: hidden; }
+		#session pre { margin: 0; }
+	</style>
+</head>
+<body style="position:relative">
+	<section id="huge-text">
+		<h2>Huge Text</h2>
+		<p>The tooltips for the buttons below have a lot of text. The tooltip div is completely elastic for this demo. The tooltips should be properly placed when they render.</p>
+		<div>
+			<input type="button" class="north-west-alt" value="North West Alt" />
+			<input type="button" class="north-west" value="North West" />
+			<input type="button" class="north" value="North" />
+			<input type="button" class="north-east" value="North East" />
+			<input type="button" class="north-east-alt" value="North East Alt" /><br />
+			<input type="button" class="west" value="West" />
+			<input type="button" class="east" value="East" /><br />
+			<input type="button" class="south-west-alt" value="South West Alt" />
+			<input type="button" class="south-west" value="South West" />
+			<input type="button" class="south" value="South" />
+			<input type="button" class="south-east" value="South East" />
+			<input type="button" class="south-east-alt" value="South East Alt" />
+		</div>
+	</section>
+	<section id="huge-text-smart">
+		<h2>Huge Text with Smart Placement</h2>
+		<p>The tooltips for the buttons below have a lot of text. The tooltip div is completely elastic for this demo. The tooltips should be properly placed when they render.</p>
+		<div>
+			<input type="button" class="north-west-alt" value="North West Alt" />
+			<input type="button" class="north-west" value="North West" />
+			<input type="button" class="north" value="North" />
+			<input type="button" class="north-east" value="North East" />
+			<input type="button" class="north-east-alt" value="North East Alt" /><br />
+			<input type="button" class="west" value="West" />
+			<input type="button" class="east" value="East" /><br />
+			<input type="button" class="south-west-alt" value="South West Alt" />
+			<input type="button" class="south-west" value="South West" />
+			<input type="button" class="south" value="South" />
+			<input type="button" class="south-east" value="South East" />
+			<input type="button" class="south-east-alt" value="South East Alt" />
+		</div>
+	</section>
+	<section id="trapped-mousefollow" data-powertip="This is the tooltip text.&lt;br /&gt;It is tall so you can test the padding.">
+		<h2>Trapped mouse following tooltip</h2>
+		<p>This box has a mouse following tooltip.</p>
+		<p>Trap it in the bottom right corner of the viewport. It should flip out of the way. It should not flip if it only hits one edge.</p>
+	</section>
+	<div id="session"><pre /></div>
+</body>
+</html>
diff --git a/test/tests-bodyoffset.js b/test/tests-bodyoffset.js
new file mode 100644
index 00000000..34603564
--- /dev/null
+++ b/test/tests-bodyoffset.js
@@ -0,0 +1,69 @@
+$(function() {
+	'use strict';
+
+	// setup huge text tooltips
+	var hugeText = [
+		'Lorem ipsum dolor sit amet, consectetur adipiscing elit. Praesent sed',
+		'volutpat tellus. Fusce mollis iaculis est at sodales. Proin aliquam',
+		'bibendum neque, nec blandit orci porttitor non. Cras lacinia varius',
+		'felis vel ultricies. Nulla eu sapien arcu, dapibus tempor eros.',
+		'Praesent aliquet hendrerit commodo. Pellentesque habitant morbi',
+		'tristique senectus et netus et malesuada fames ac turpis egestas.',
+		'Proin gravida justo faucibus urna dictum id egestas velit hendrerit.',
+		'Praesent dapibus rutrum tempor. Sed ultrices varius purus, eu rhoncus',
+		'tortor scelerisque sit amet. Sed vitae molestie diam. Pellentesque',
+		'posuere euismod venenatis. Proin ut ligula vel urna lacinia accumsan.',
+		'Quisque commodo ultrices orci ut cursus. Aliquam in dolor orci. Nunc',
+		'pretium euismod odio.'
+	].join(' ');
+	$.each(
+		[
+			'north',
+			'east',
+			'south',
+			'west',
+			'north-west',
+			'north-east',
+			'south-west',
+			'south-east',
+			'north-west-alt',
+			'north-east-alt',
+			'south-west-alt',
+			'south-east-alt'
+		],
+		function(i, val) {
+			$('.' + val).data('powertip', hugeText);
+		}
+	);
+
+	// Huge text
+	$('#huge-text .north').powerTip({ placement: 'n' });
+	$('#huge-text .east').powerTip({ placement: 'e' });
+	$('#huge-text .south').powerTip({ placement: 's' });
+	$('#huge-text .west').powerTip({ placement: 'w' });
+	$('#huge-text .north-west').powerTip({ placement: 'nw' });
+	$('#huge-text .north-east').powerTip({ placement: 'ne' });
+	$('#huge-text .south-west').powerTip({ placement: 'sw' });
+	$('#huge-text .south-east').powerTip({ placement: 'se' });
+	$('#huge-text .north-west-alt').powerTip({ placement: 'nw-alt' });
+	$('#huge-text .north-east-alt').powerTip({ placement: 'ne-alt' });
+	$('#huge-text .south-west-alt').powerTip({ placement: 'sw-alt' });
+	$('#huge-text .south-east-alt').powerTip({ placement: 'se-alt' });
+
+	// Huge text with smart placement
+	$('#huge-text-smart .north').powerTip({ placement: 'n', smartPlacement: true });
+	$('#huge-text-smart .east').powerTip({ placement: 'e', smartPlacement: true });
+	$('#huge-text-smart .south').powerTip({ placement: 's', smartPlacement: true });
+	$('#huge-text-smart .west').powerTip({ placement: 'w', smartPlacement: true });
+	$('#huge-text-smart .north-west').powerTip({ placement: 'nw', smartPlacement: true });
+	$('#huge-text-smart .north-east').powerTip({ placement: 'ne', smartPlacement: true });
+	$('#huge-text-smart .south-west').powerTip({ placement: 'sw', smartPlacement: true });
+	$('#huge-text-smart .south-east').powerTip({ placement: 'se', smartPlacement: true });
+	$('#huge-text-smart .north-west-alt').powerTip({ placement: 'nw-alt', smartPlacement: true });
+	$('#huge-text-smart .north-east-alt').powerTip({ placement: 'ne-alt', smartPlacement: true });
+	$('#huge-text-smart .south-west-alt').powerTip({ placement: 'sw-alt', smartPlacement: true });
+	$('#huge-text-smart .south-east-alt').powerTip({ placement: 'se-alt', smartPlacement: true });
+
+	// Trapped mouse following tooltip
+	$('#trapped-mousefollow').powerTip({ followMouse: true });
+});
diff --git a/test/unit/placementcalculator.js b/test/unit/placementcalculator.js
index 699453bd..031d4a24 100644
--- a/test/unit/placementcalculator.js
+++ b/test/unit/placementcalculator.js
@@ -40,11 +40,6 @@ $(function() {
 				case 'n':
 				case 'ne':
 				case 'nw-alt':
-					assert.strictEqual(coords.top, 'auto', key + ': top property is set to auto');
-					assert.strictEqual($.isNumeric(coords.left), true, key + ': left property is set to a number');
-					assert.strictEqual(coords.right, 'auto', key + ': right property is set to auto');
-					assert.strictEqual($.isNumeric(coords.bottom), true, key + ': bottom property is set to a number');
-					break;
 				case 'e':
 				case 's':
 				case 'se':
@@ -57,17 +52,12 @@ $(function() {
 				case 'w':
 				case 'sw':
 				case 'se-alt':
-					assert.strictEqual($.isNumeric(coords.top), true, key + ': top property is set to a number');
-					assert.strictEqual(coords.left, 'auto', key + ': left property is set to auto');
-					assert.strictEqual($.isNumeric(coords.right), true, key + ': right property is set to a number');
-					assert.strictEqual(coords.bottom, 'auto', key + ': bottom property is set to auto');
-					break;
 				case 'nw':
 				case 'ne-alt':
-					assert.strictEqual(coords.top, 'auto', key + ': top property is set to auto');
+					assert.strictEqual($.isNumeric(coords.top), true, key + ': top property is set to a number');
 					assert.strictEqual(coords.left, 'auto', key + ': left property is set to auto');
 					assert.strictEqual($.isNumeric(coords.right), true, key + ': right property is set to a number');
-					assert.strictEqual($.isNumeric(coords.bottom), true, key + ': bottom property is set to a number');
+					assert.strictEqual(coords.bottom, 'auto', key + ': bottom property is set to auto');
 					break;
 			}
 		});