diff --git a/pygmt/base_plotting.py b/pygmt/base_plotting.py
index dc076a39bba..1b136e588c5 100644
--- a/pygmt/base_plotting.py
+++ b/pygmt/base_plotting.py
@@ -813,7 +813,7 @@ def legend(self, spec=None, position="JTR+jTR+o0.2c", box="+gwhite+p1p", **kwarg
             lib.call_module("legend", arg_str)
 
     @fmt_docstring
-    @use_alias(R="region", J="projection", B="frame", W="pen")
+    @use_alias(R="region", J="projection", B="frame", C="clearance", W="pen")
     @kwargs_to_strings(
         R="sequence",
         textfiles="sequence_space",
@@ -876,6 +876,18 @@ def text(
             input textfile(s) must have this as a column.
         {J}
         {R}
+        clearance : str
+            ``[dx/dy][+to|O|c|C]``
+            Adjust the clearance between the text and the surrounding box
+            [15%]. Only used if *pen* or *fill* are specified. Append the unit
+            you want ('c' for cm, 'i' for inch, or 'p' for point; if not given
+            we consult 'PROJ_LENGTH_UNIT') or '%' for a percentage of the
+            font size. Optionally, use modifier '+t' to set the shape of the
+            textbox when using *fill* and/or *pen*. Append lower case 'o' to
+            get a straight rectangle [Default]. Append upper case 'O' to get a
+            rounded rectangle. In paragraph mode (*paragraph*) you can also
+            append lower case 'c' to get a concave rectangle or append upper
+            case 'C' to get a convex rectangle.
         pen : str
             Sets the pen used to draw a rectangle around the text string
             (see *clearance*) [Default is width = default, color = black,
diff --git a/pygmt/tests/baseline/test_text_round_clearance.png b/pygmt/tests/baseline/test_text_round_clearance.png
new file mode 100644
index 00000000000..c35e44a5d74
Binary files /dev/null and b/pygmt/tests/baseline/test_text_round_clearance.png differ
diff --git a/pygmt/tests/test_text.py b/pygmt/tests/test_text.py
index 88e7f8e9792..930a6d19f72 100644
--- a/pygmt/tests/test_text.py
+++ b/pygmt/tests/test_text.py
@@ -148,6 +148,24 @@ def test_text_pen(region, projection):
     return fig
 
 
+@pytest.mark.mpl_image_compare
+def test_text_round_clearance(region, projection):
+    """
+    Print text with round rectangle box clearance
+    """
+    fig = Figure()
+    fig.text(
+        region=region,
+        projection=projection,
+        x=1.2,
+        y=1.2,
+        text="clearance around text",
+        clearance="90%+tO",
+        pen="default,black,dashed",
+    )
+    return fig
+
+
 @pytest.mark.mpl_image_compare
 def test_text_justify_bottom_right_and_top_left(region, projection):
     """