diff --git a/lisp/org.el b/lisp/org.el
index a53f36d33..b6717066c 100644
--- a/lisp/org.el
+++ b/lisp/org.el
@@ -7332,13 +7332,12 @@ When REMOVE is non-nil, remove the subtree from the clipboard."
 	      ((looking-at-p org-outline-regexp-bol) (org-outline-level))))
 	    (previous-level
 	     (save-excursion
-	       (org-previous-visible-heading 1)
+	       (unless (org-at-heading-p) (org-previous-visible-heading 1))
 	       (if (org-at-heading-p) (org-outline-level) 1)))
 	    (next-level
 	     (save-excursion
-	       (if (org-at-heading-p) (org-outline-level)
-	         (org-next-visible-heading 1)
-	         (if (org-at-heading-p) (org-outline-level) 1))))
+	       (org-next-visible-heading 1)
+	       (if (org-at-heading-p) (org-outline-level) 1)))
 	    (new-level (or force-level (max previous-level next-level)))
 	    (shift (if (or (= old-level -1)
 			   (= new-level -1)
diff --git a/testing/lisp/test-org.el b/testing/lisp/test-org.el
index 8db0bcb3b..36f4d796b 100644
--- a/testing/lisp/test-org.el
+++ b/testing/lisp/test-org.el
@@ -9372,6 +9372,24 @@ CLOSED: %s
 	  (org-test-with-temp-text "* H1\n<point>\n** H2"
 	    (org-paste-subtree nil "* Text")
 	    (buffer-string))))
+  ;; When point is on heading at bol, insert before
+  (should
+   (equal "* Text\n* H1\n** H2"
+	  (org-test-with-temp-text "<point>* H1\n** H2"
+	    (org-paste-subtree nil "*** Text")
+	    (buffer-string))))
+  ;; When point is on heading but not at bol, use smallest level among
+  ;; current heading and next, inserting before the next heading.
+  (should
+   (equal "* H1\ncontents\n** Text\n** H2"
+	  (org-test-with-temp-text "* H1<point>\ncontents\n** H2"
+	    (org-paste-subtree nil "*** Text")
+	    (buffer-string))))
+  (should
+   (equal "*** H1\ncontents\n*** Text\n* H2"
+	  (org-test-with-temp-text "*** H1<point>\ncontents\n* H2"
+	    (org-paste-subtree nil "* Text")
+	    (buffer-string))))
   ;; When on an empty heading, after the stars, deduce the new level
   ;; from the number of stars.
   (should