diff --git a/pyqtgraph/graphicsItems/GradientLegend.py b/pyqtgraph/graphicsItems/GradientLegend.py
index 28c2cd63..649a23bc 100644
--- a/pyqtgraph/graphicsItems/GradientLegend.py
+++ b/pyqtgraph/graphicsItems/GradientLegend.py
@@ -6,7 +6,7 @@ __all__ = ['GradientLegend']
 
 class GradientLegend(UIGraphicsItem):
     """
-    Draws a color gradient rectangle along with text labels denoting the value at specific 
+    Draws a color gradient rectangle along with text labels denoting the value at specific
     points along the gradient.
     """
     
@@ -50,6 +50,9 @@ class GradientLegend(UIGraphicsItem):
         if unit[0] is None:  
             return
         
+        ## Have to scale painter so that text and gradients are correct size and not upside down
+        p.scale(unit[0], -unit[1])
+
         ## determine max width of all labels
         labelWidth = 0
         labelHeight = 0
@@ -58,57 +61,54 @@ class GradientLegend(UIGraphicsItem):
             labelWidth = max(labelWidth, b.width())
             labelHeight = max(labelHeight, b.height())
             
-        labelWidth *= unit[0]
-        labelHeight *= unit[1]
-        
         textPadding = 2  # in px
         
+        xR = rect.right()  / unit[0]
+        xL = rect.left()   / unit[0]
+        yB = -(rect.top()    / unit[1])
+        yT = -(rect.bottom() / unit[1])
+        
+        # coordinates describe edges of text and bar, additional margins will be added for background
         if self.offset[0] < 0:
-            x3 = rect.right() + unit[0] * self.offset[0]
-            x2 = x3 - labelWidth - unit[0]*textPadding*2
-            x1 = x2 - unit[0] * self.size[0]
+            x3 = xR + self.offset[0] # right edge from right edge of view, offset is negative!
+            x2 = x3 - labelWidth - 2*textPadding # right side of color bar
+            x1 = x2 - self.size[0]               # left side of color bar
         else:
-            x1 = rect.left() + unit[0] * self.offset[0]
-            x2 = x1 + unit[0] * self.size[0]
-            x3 = x2 + labelWidth + unit[0]*textPadding*2
+            x1 = xL + self.offset[0] # left edge from left edge of view
+            x2 = x1 + self.size[0]
+            x3 = x2 + labelWidth + 2*textPadding # leave room for 2x textpadding between bar and text
         if self.offset[1] < 0:
-            y2 = rect.top() - unit[1] * self.offset[1]
-            y1 = y2 + unit[1] * self.size[1]
+            y2 = yB + self.offset[1] # bottom edge from bottom of view, offset is negative!
+            y1 = y2 - self.size[1]
         else:
-            y1 = rect.bottom() - unit[1] * self.offset[1]
-            y2 = y1 - unit[1] * self.size[1]
+            y1 = yT + self.offset[1] # top edge from top of view
+            y2 = y1 + self.size[1]
         self.b = [x1,x2,x3,y1,y2,labelWidth]
-            
+
         ## Draw background
         p.setPen(self.pen)
         p.setBrush(QtGui.QBrush(QtGui.QColor(255,255,255,100)))
         rect = QtCore.QRectF(
-            QtCore.QPointF(x1 - unit[0]*textPadding, y1 + labelHeight/2 + unit[1]*textPadding), 
-            QtCore.QPointF(x3, y2 - labelHeight/2 - unit[1]*textPadding)
+            QtCore.QPointF(x1 - textPadding, y1-labelHeight/2 - textPadding), # extra left/top padding 
+            QtCore.QPointF(x3 + textPadding, y2+labelHeight/2 + textPadding)  # extra bottom/right padding
         )
         p.drawRect(rect)
-        
-        
-        ## Have to scale painter so that text and gradients are correct size. Bleh.
-        p.scale(unit[0], unit[1])
-        
+
         ## Draw color bar
-        self.gradient.setStart(0, y1/unit[1])
-        self.gradient.setFinalStop(0, y2/unit[1])
+        self.gradient.setStart(0, y1)
+        self.gradient.setFinalStop(0, y2)
         p.setBrush(self.gradient)
         rect = QtCore.QRectF(
-            QtCore.QPointF(x1/unit[0], y1/unit[1]), 
-            QtCore.QPointF(x2/unit[0], y2/unit[1])
+            QtCore.QPointF(x1, y1), 
+            QtCore.QPointF(x2, y2)
         )
         p.drawRect(rect)
-        
-        
+
         ## draw labels
         p.setPen(QtGui.QPen(QtGui.QColor(0,0,0)))
-        tx = x2 + unit[0]*textPadding
-        lh = labelHeight/unit[1]
+        tx = x2 + 2 * textPadding # margin between bar and text
+        lh = labelHeight
+        lw = labelWidth
         for k in self.labels:
             y = y1 + self.labels[k] * (y2-y1)
-            p.drawText(QtCore.QRectF(tx/unit[0], y/unit[1] - lh/2.0, 1000, lh), QtCore.Qt.AlignLeft | QtCore.Qt.AlignVCenter, str(k))
-        
-        
+            p.drawText(QtCore.QRectF(tx, y - lh/2, lw, lh), QtCore.Qt.AlignLeft | QtCore.Qt.AlignVCenter, str(k))