diff --git a/lib/base32.rb b/lib/base32.rb
index ff089ff..7a76f19 100644
--- a/lib/base32.rb
+++ b/lib/base32.rb
@@ -17,7 +17,7 @@ def initialize(bytes)
     def decode
       bytes = @bytes.take_while {|c| c != 61} # strip padding
       n = (bytes.length * 5.0 / 8.0).floor
-      p = bytes.length < 8 ? 5 - (n * 8) % 5 : 0
+      p = n == 0 ? 5 : (bytes.length * 5) % (n * 8)
       c = bytes.inject(0) do |m,o|
         i = Base32.table.index(o.chr)
         raise ArgumentError, "invalid character '#{o.chr}'" if i.nil?
diff --git a/test/base32_test.rb b/test/base32_test.rb
index a101428..91bbbc5 100644
--- a/test/base32_test.rb
+++ b/test/base32_test.rb
@@ -8,6 +8,11 @@ def assert_decoding(encoded, plain)
     assert_equal(plain, decoded)
   end
 
+  def assert_hex_decoding(encoded, hex)
+    plain = [hex].pack('H*')
+    assert_decoding(encoded, plain)
+  end
+
   def assert_encoding(encoded, plain)
     actual = Base32.encode(plain)
     assert_equal(encoded, actual)
@@ -121,4 +126,18 @@ def test_encode_decode_with_alternate_table
     Base32.table = Base32::TABLE # so as not to ruin other tests
   end
 
+  def test_decoding_ignores_pad_bits
+    assert_hex_decoding('M', '') # (01100)
+    assert_hex_decoding('MU', '65') # 01100 101(00)
+    assert_hex_decoding('MV', '65') # 01100 101(01)
+    assert_hex_decoding('MVS', '65') # 01100 101(01 10010)
+    assert_hex_decoding('MVSA', '6564') # 01100 10101 10010 0(0000)
+    assert_hex_decoding('MVSJ', '6564') # 01100 10101 10010 0(1001)
+    assert_hex_decoding('MVSJO', '656497') # 01100 10101 10010 01001 0111(0)
+    assert_hex_decoding('MVSJP', '656497') # 01100 10101 10010 01001 0111(1)
+    assert_hex_decoding('MVSJOA', '656497') # 01100 10101 10010 01001 0111(0 00000)
+    assert_hex_decoding('MVSJOY', '656497') # 01100 10101 10010 01001 0111(0 11000)
+    assert_hex_decoding('MVSJOYQ', '65649762') # 01100 10101 10010 01001 01110 11000 10(000)
+    assert_hex_decoding('MVSJOYX', '65649762') # 01100 10101 10010 01001 01110 11000 10(111)
+  end
 end