diff --git a/.changeset/moody-mayflies-attack.md b/.changeset/moody-mayflies-attack.md
new file mode 100644
index 000000000..997e98d8c
--- /dev/null
+++ b/.changeset/moody-mayflies-attack.md
@@ -0,0 +1,5 @@
+---
+"victory-core": patch
+---
+
+Fix the label background position when using dy fns
diff --git a/packages/victory-core/src/victory-label/victory-label.tsx b/packages/victory-core/src/victory-label/victory-label.tsx
index 3b671a6a9..41dcbe9a9 100644
--- a/packages/victory-core/src/victory-label/victory-label.tsx
+++ b/packages/victory-core/src/victory-label/victory-label.tsx
@@ -508,7 +508,7 @@ const getCalculatedProps = <T extends VictoryLabelProps>(props: T) => {
     verticalAnchor,
     dx,
     dy,
-    originalDy: props.dy,
+    originalDy: Helpers.evaluateProp(props.dy, props),
     transform,
     x,
     y,
diff --git a/stories/victory-label.stories.js b/stories/victory-label.stories.js
index 66b094861..20c9752e4 100644
--- a/stories/victory-label.stories.js
+++ b/stories/victory-label.stories.js
@@ -581,6 +581,38 @@ export const BackgroundStyles = () => {
           />
         }
       />
+      <VictoryScatter
+        {...defaultScatterProps}
+        labelComponent={
+          <VictoryLabel
+            dy={({ datum }) => (datum.y > 0 ? -5 : 8)}
+            verticalAnchor="end"
+            backgroundPadding={{ top: 5, right: 5, bottom: 5, left: 5 }}
+            backgroundStyle={{ fill: "plum", stroke: "#000000" }}
+            text={[
+              "Victory is awesome.",
+              "background styles",
+              "work with dy functions",
+            ]}
+          />
+        }
+      />
+      <VictoryScatter
+        {...defaultScatterProps}
+        labelComponent={
+          <VictoryLabel
+            dx={({ datum }) => (datum.y > 0 ? -5 : 8)}
+            verticalAnchor="end"
+            backgroundPadding={{ top: 5, right: 5, bottom: 5, left: 5 }}
+            backgroundStyle={{ fill: "thistle", stroke: "#000000" }}
+            text={[
+              "Victory is awesome.",
+              "background styles",
+              "work with dx functions",
+            ]}
+          />
+        }
+      />
     </div>
   );
 };