diff --git a/package-lock.json b/package-lock.json
index 3a4e2c1..a358015 100644
--- a/package-lock.json
+++ b/package-lock.json
@@ -22,7 +22,7 @@
       "devDependencies": {
         "@commitlint/cli": "^21.2.2",
         "@commitlint/config-conventional": "^21.2.0",
-        "@termix-ssh/plugin-sdk": "^1.0.25",
+        "@termix-ssh/plugin-sdk": "^1.1.0",
         "@testing-library/dom": "^10.4.2",
         "@testing-library/jest-dom": "^7.0.1",
         "@testing-library/react": "^16.3.3",
@@ -46,7 +46,7 @@
         "node": ">=22.12.0"
       },
       "peerDependencies": {
-        "@termix-ssh/plugin-sdk": "^1.0.25",
+        "@termix-ssh/plugin-sdk": "^1.1.0",
         "drizzle-orm": "^0.45.2",
         "express": "^5.2.1",
         "multer": "^2.3.0",
@@ -2291,9 +2291,9 @@
       }
     },
     "node_modules/@termix-ssh/plugin-sdk": {
-      "version": "1.0.25",
-      "resolved": "https://registry.npmjs.org/@termix-ssh/plugin-sdk/-/plugin-sdk-1.0.25.tgz",
-      "integrity": "sha512-rJlbB/Wsas+0zRQabq4JXErU1dP8S0iYUi0J1LjHeecAirZr0Ffv4QsaagAuHOPXj3XSeYTJQPX0cAkwTR+NkA==",
+      "version": "1.1.1",
+      "resolved": "https://registry.npmjs.org/@termix-ssh/plugin-sdk/-/plugin-sdk-1.1.1.tgz",
+      "integrity": "sha512-/bSnsIxvQBmu4qAtPLZH3gjaVSfGggTRRCI227RC/Ay/9UvwIDWMJhbCJeVCGWyG0SIb43fvI6USFi8NxCOPcA==",
       "dev": true,
       "license": "Apache-2.0",
       "dependencies": {
diff --git a/src/frontend/local-terminal/LocalTerminal.tsx b/src/frontend/local-terminal/LocalTerminal.tsx
index 4a32e0b..fedb192 100644
--- a/src/frontend/local-terminal/LocalTerminal.tsx
+++ b/src/frontend/local-terminal/LocalTerminal.tsx
@@ -341,8 +341,8 @@ export function LocalTerminal({
           </Select2>
         </div>
       )}
-      <div className="relative min-h-0 flex-1">
-        <div ref={xtermRef} className="h-full w-full p-2" />
+      <div className="relative min-h-0 flex-1 p-2">
+        <div ref={xtermRef} className="h-full w-full" />
         <ComponentSlot
           slotId={TERMINAL_OVERLAY_SLOT}
           when={{ host: undefined }}
diff --git a/tests/frontend/local-terminal/LocalTerminal-layout.test.tsx b/tests/frontend/local-terminal/LocalTerminal-layout.test.tsx
new file mode 100644
index 0000000..0647a0b
--- /dev/null
+++ b/tests/frontend/local-terminal/LocalTerminal-layout.test.tsx
@@ -0,0 +1,98 @@
+import { cleanup, render } from "@testing-library/react";
+import { FitAddon } from "@xterm/addon-fit";
+import type { Terminal } from "@xterm/xterm";
+import { afterEach, describe, expect, it, vi } from "vitest";
+
+const state = vi.hoisted(() => ({
+  ref: { current: null as HTMLElement | null },
+}));
+vi.mock("react-xtermjs", () => ({
+  useXTerm: () => ({ instance: null, ref: state.ref }),
+}));
+vi.mock("@termix-ssh/plugin-sdk/frontend", () => ({
+  useTranslation: () => ({ t: (key: string) => key }),
+  usePluginApi: () => null,
+}));
+vi.mock("@termix-ssh/plugin-sdk/ui", () => ({
+  useAppTheme: () => ({ theme: "dark" }),
+  ComponentSlot: () => null,
+  Select2: () => null,
+}));
+vi.mock("../../../src/frontend/terminal-api", () => ({
+  getDefaultAppearance: () => new Promise(() => {}),
+}));
+vi.mock("../../../src/frontend/terminal-tools/TerminalContextMenu", () => ({
+  TerminalContextMenu: () => null,
+}));
+
+import { LocalTerminal } from "../../../src/frontend/local-terminal/LocalTerminal";
+
+afterEach(() => {
+  vi.restoreAllMocks();
+  cleanup();
+});
+
+describe("local terminal fitting inside its padded pane", () => {
+  it.each([300, 301, 400, 600, 601, 800])(
+    "keeps every fitted row inside a %dpx pane",
+    (height) => {
+      const { container } = render(
+        <LocalTerminal instanceId="local" isVisible />,
+      );
+      const style = document.createElement("style");
+      style.textContent = "* { box-sizing: border-box } .p-2 { padding: 8px }";
+      container.append(style);
+      const mount = state.ref.current!;
+      const wrapper = mount.parentElement!;
+      const element = document.createElement("div");
+      element.style.padding = "0px";
+      mount.append(element);
+      const computed = window.getComputedStyle.bind(window);
+      const inset = (node: Element) => {
+        const css = computed(node);
+        return (
+          (parseFloat(css.paddingTop) || 0) +
+          (parseFloat(css.paddingBottom) || 0)
+        );
+      };
+      const mountHeight = height - inset(wrapper);
+      // jsdom has no layout engine. Supply the mount's border-box dimensions;
+      // keep production markup, padding and FitAddon measurement logic real.
+      vi.spyOn(window, "getComputedStyle").mockImplementation((node) => {
+        const css = computed(node);
+        if (node === mount) {
+          return new Proxy(css, {
+            get(target, property) {
+              if (property === "getPropertyValue")
+                return (name: string) =>
+                  name === "height"
+                    ? `${mountHeight}px`
+                    : name === "width"
+                      ? "900px"
+                      : target.getPropertyValue(name);
+              return Reflect.get(target, property);
+            },
+          });
+        }
+        return css;
+      });
+      const terminal = {
+        element,
+        options: { scrollback: 1000 },
+        _core: {
+          _renderService: {
+            dimensions: { css: { cell: { width: 8, height: 16 } } },
+          },
+        },
+      };
+      const fit = new FitAddon();
+      fit.activate(terminal as unknown as Terminal);
+      const dimensions = fit.proposeDimensions()!;
+      expect(dimensions.rows * 16 + inset(mount)).toBeLessThanOrEqual(
+        mountHeight,
+      );
+      expect(inset(wrapper) + inset(mount)).toBe(16);
+      expect(dimensions.rows).toBe(Math.floor((height - 16) / 16));
+    },
+  );
+});