diff --git a/js/parts-more/RadialAxis.js b/js/parts-more/RadialAxis.js
index a12e15fc265..a7d7b8b2b5e 100644
--- a/js/parts-more/RadialAxis.js
+++ b/js/parts-more/RadialAxis.js
@@ -616,8 +616,15 @@ addEvent(Tick, 'afterGetLabelPosition', function (e) {
         ) % 360;
 
     if (axis.isRadial) { // Both X and Y axes in a polar chart
-        ret = axis.getPosition(this.pos, (axis.center[2] / 2) +
-            pick(labelOptions.distance, -25));
+        ret = axis.getPosition(
+            this.pos,
+            (axis.center[2] / 2) +
+                H.relativeLength(
+                    pick(labelOptions.distance, -25),
+                    axis.center[2] / 2,
+                    -axis.center[2] / 2
+                )
+        );
 
         // Automatically rotated
         if (labelOptions.rotation === 'auto') {
diff --git a/js/parts/Axis.js b/js/parts/Axis.js
index 766ec54b493..04f36d39b11 100644
--- a/js/parts/Axis.js
+++ b/js/parts/Axis.js
@@ -2504,10 +2504,17 @@ H.extend(Axis.prototype, /** @lends Highcharts.Axis.prototype */{
          */
 
         /**
-         * Angular gauges and solid gauges only. The label's pixel distance
-         * from the perimeter of the plot area.
+         * Angular gauges and solid gauges only.
+         * The label's pixel distance from the perimeter of the plot area.
          *
-         * @type      {number}
+         * Since v7.1.2: If it's a percentage string, it is interpreted the
+         * same as [series.radius](#plotOptions.gauge.radius), so label can be
+         * aligned under the gauge's shape.
+         *
+         * @sample {highcharts} highcharts/yaxis/labels-distance/
+         *                      Labels centered under the arc
+         *
+         * @type      {number|string}
          * @default   -25
          * @product   highcharts
          * @apioption yAxis.labels.distance