diff --git a/src/libxrpl/tx/transactors/payment/Payment.cpp b/src/libxrpl/tx/transactors/payment/Payment.cpp
index c4c2f9227b..d2da173345 100644
--- a/src/libxrpl/tx/transactors/payment/Payment.cpp
+++ b/src/libxrpl/tx/transactors/payment/Payment.cpp
@@ -339,17 +339,36 @@ Payment::checkGranularSemantics(
             bool const accountIsHolder =
                 accountIsLow ? rawBalance > beast::kZero : rawBalance < beast::kZero;
 
+            bool const mayIssue =
+                heldGranularPermissions.contains(PaymentMint) && destLimit > beast::kZero;
+
             // PaymentMint requires the destination to be the holder and the account to be the
             // issuer. destLimit > 0: destination is willing to hold account's IOUs (account is the
             // issuer). !accountIsHolder: DirectStepI will issue, not redeem.
-            if (heldGranularPermissions.contains(PaymentMint) && destLimit > beast::kZero &&
-                !accountIsHolder)
+            if (mayIssue && !accountIsHolder)
                 return tesSUCCESS;
 
             // PaymentBurn requires the source account to be the holder and the destination to be
             // the issuer. accountIsHolder: DirectStepI will redeem, not issue.
             if (heldGranularPermissions.contains(PaymentBurn) && accountIsHolder)
-                return tesSUCCESS;
+            {
+                if (view.rules().enabled(fixCleanup3_4_0))
+                {
+                    // Redeeming stops at the balance held; beyond that the payment engine
+                    // crosses zero and issues the account's own IOUs, which is a mint. So with
+                    // only PaymentBurn we must check the amount against the balance held. The
+                    // granular template forbids sfPaths, tfPartialPayment and a cross-asset
+                    // sfSendMax, so this is a single direct step, sfAmount is what the
+                    // trustline is debited.
+                    STAmount const held = accountIsLow ? rawBalance : -rawBalance;
+                    if (dstAmount <= held || mayIssue)
+                        return tesSUCCESS;
+                }
+                else
+                {
+                    return tesSUCCESS;
+                }
+            }
 
             return terNO_DELEGATE_PERMISSION;
         });
diff --git a/src/test/app/Delegate_test.cpp b/src/test/app/Delegate_test.cpp
index 3ff90c2a8f..5414269333 100644
--- a/src/test/app/Delegate_test.cpp
+++ b/src/test/app/Delegate_test.cpp
@@ -1144,6 +1144,88 @@ class Delegate_test : public beast::unit_test::Suite
             env.require(Balance(gw, aliceUSD(-20)));
         }
 
+        // PaymentBurn must not exceed the balance the account holds. Redeeming past
+        // zero makes the payment engine issue the account's own IOUs, which is a mint.
+        {
+            Env env(*this, features);
+            Account const alice{"alice"};
+            Account const bob{"bob"};
+            Account const gw{"gateway"};
+            auto const gwUSD = gw["USD"];
+            auto const aliceUSD = alice["USD"];
+
+            env.fund(XRP(10000), alice, bob, gw);
+            env.trust(gwUSD(200), alice);
+            env.close();
+
+            env(pay(gw, alice, gwUSD(50)));
+            env.close();
+            env.require(Balance(alice, gwUSD(50)));
+
+            // gw accepts alice-issued USD, so the engine has issuing liquidity
+            // available once the trustline reaches zero.
+            env(trust(gw, aliceUSD(200)));
+            env.close();
+
+            env(delegate::set(alice, bob, {"PaymentBurn"}));
+            env.close();
+
+            if (!features[fixCleanup3_4_0])
+            {
+                // Pre-fixCleanup3_4_0: the balance direction alone authorizes the payment, so it
+                // redeems alice's 50 and then mints 50 alice-issued USD.
+                env(pay(alice, gw, gwUSD(100)), delegate::As(bob));
+                env.require(Balance(alice, gwUSD(-50)));
+                env.require(Balance(gw, aliceUSD(50)));
+            }
+            else
+            {
+                // Post-fixCleanup3_4_0: Rejected because it exceeds what alice holds.
+                env(pay(alice, gw, gwUSD(100)), delegate::As(bob), Ter(terNO_DELEGATE_PERMISSION));
+                env.require(Balance(alice, gwUSD(50)));
+                env.require(Balance(gw, aliceUSD(-50)));
+
+                // Allowed because it is less than what alice holds.
+                env(pay(alice, gw, gwUSD(20)), delegate::As(bob));
+                env.require(Balance(alice, gwUSD(30)));
+                env.close();
+
+                // Exactly what alice holds: allowed, and settles at zero.
+                env(pay(alice, gw, gwUSD(30)), delegate::As(bob));
+                env.require(Balance(alice, gwUSD(0)));
+                env.close();
+
+                // Nothing left to burn: rejected.
+                env(pay(alice, gw, gwUSD(1)), delegate::As(bob), Ter(terNO_DELEGATE_PERMISSION));
+                env.require(Balance(gw, aliceUSD(0)));
+            }
+        }
+
+        // A delegate holding both PaymentMint and PaymentBurn may cross zero.
+        {
+            Env env(*this, features);
+            Account const alice{"alice"};
+            Account const bob{"bob"};
+            Account const gw{"gateway"};
+            auto const gwUSD = gw["USD"];
+            auto const aliceUSD = alice["USD"];
+
+            env.fund(XRP(10000), alice, bob, gw);
+            env.trust(gwUSD(200), alice);
+            env.close();
+
+            env(pay(gw, alice, gwUSD(50)));
+            env(trust(gw, aliceUSD(200)));
+            env.close();
+
+            env(delegate::set(alice, bob, {"PaymentBurn", "PaymentMint"}));
+            env.close();
+
+            env(pay(alice, gw, gwUSD(100)), delegate::As(bob));
+            env.require(Balance(alice, gwUSD(-50)));
+            env.require(Balance(gw, aliceUSD(50)));
+        }
+
         // Test invalid fields or flags not allowed in granular permission template
         {
             Env env(*this, features);
@@ -2916,6 +2998,7 @@ class Delegate_test : public beast::unit_test::Suite
         testAccountDelete();
         testDelegateTransaction();
         testPaymentGranular(all);
+        testPaymentGranular(all - fixCleanup3_4_0);
         testTrustSetGranular();
         testAccountSetGranular();
         testMPTokenIssuanceSetGranular();