diff --git a/packages/trace-viewer/src/sw/snapshotRenderer.ts b/packages/trace-viewer/src/sw/snapshotRenderer.ts
index a9f89ba273..b3e98973b4 100644
--- a/packages/trace-viewer/src/sw/snapshotRenderer.ts
+++ b/packages/trace-viewer/src/sw/snapshotRenderer.ts
@@ -429,12 +429,12 @@ function snapshotScript(...targetIds: (string | undefined)[]) {
 
             const boundingRect = canvas.getBoundingClientRect();
             const xStart = boundingRect.left / window.innerWidth;
-            const yStart = boundingRect.top / window.innerHeight;
+            const yStart = boundingRect.top / window.innerWidth;
             const xEnd = boundingRect.right / window.innerWidth;
-            const yEnd = boundingRect.bottom / window.innerHeight;
+            const yEnd = boundingRect.bottom / window.innerWidth;
 
-            const partiallyUncaptured = xEnd > 1 || yEnd > 1;
-            const fullyUncaptured = xStart > 1 || yStart > 1;
+            const partiallyUncaptured = boundingRect.right > window.innerWidth || boundingRect.bottom > window.innerHeight;
+            const fullyUncaptured = boundingRect.left > window.innerWidth || boundingRect.top > window.innerHeight;
             if (fullyUncaptured) {
               canvas.title = `Playwright couldn't capture canvas contents because it's located outside the viewport.`;
               continue;
@@ -442,7 +442,7 @@ function snapshotScript(...targetIds: (string | undefined)[]) {
 
             drawCheckerboard(context, canvas);
 
-            context.drawImage(img, xStart * img.width, yStart * img.height, (xEnd - xStart) * img.width, (yEnd - yStart) * img.height, 0, 0, canvas.width, canvas.height);
+            context.drawImage(img, xStart * img.width, yStart * img.width, (xEnd - xStart) * img.width, (yEnd - yStart) * img.width, 0, 0, canvas.width, canvas.height);
             if (isUnderTest)
               // eslint-disable-next-line no-console
               console.log(`canvas drawn:`, JSON.stringify([xStart, yStart, xEnd, yEnd].map(v => Math.floor(v * 100))));
diff --git a/tests/assets/screenshots/canvas-with-overlay.html b/tests/assets/screenshots/canvas-with-overlay.html
new file mode 100644
index 0000000000..ef75b219fc
--- /dev/null
+++ b/tests/assets/screenshots/canvas-with-overlay.html
@@ -0,0 +1,42 @@
+<style>
+/* Style for the canvas */
+#myCanvas {
+    border: 2px solid #000000;
+}
+
+/* Style for the overlay div */
+#overlay {
+    position: absolute;
+    top: 150px;
+    /* Adjust position as needed */
+    left: 150px;
+    /* Adjust position as needed */
+    width: 150px;
+    height: 150px;
+    background-color: red;
+    opacity: 0.7;
+    /* Optional: make it semi-transparent */
+    display: flex;
+    align-items: center;
+    justify-content: center;
+    color: white;
+}
+
+/* Container for positioning */
+.container {
+    position: relative;
+    width: 500px;
+    height: 500px;
+}
+</style>
+
+<div class="container">
+    <canvas id="myCanvas" width="500" height="500"></canvas>
+    <div id="overlay"><span>An HTML element</span></div>
+</div>
+
+<script>
+const ctx = document.getElementById('myCanvas').getContext('2d');
+ctx.fillStyle = 'blue';
+ctx.fillRect(50, 50, 200, 200);
+</script>
\ No newline at end of file
diff --git a/tests/library/trace-viewer.spec.ts b/tests/library/trace-viewer.spec.ts
index 0c8ad1aafd..70bfe4228a 100644
--- a/tests/library/trace-viewer.spec.ts
+++ b/tests/library/trace-viewer.spec.ts
@@ -1510,7 +1510,7 @@ test('canvas clipping', async ({ runAndTrace, page, server }) => {
   });
 
   const msg = await traceViewer.page.waitForEvent('console', { predicate: msg => msg.text().startsWith('canvas drawn:') });
-  expect(msg.text()).toEqual('canvas drawn: [0,91,12,111]');
+  expect(msg.text()).toEqual('canvas drawn: [0,51,12,62]');
 
   const snapshot = await traceViewer.snapshotFrame('page.goto');
   await expect(snapshot.locator('canvas')).toHaveAttribute('title', `Playwright couldn't capture full canvas contents because it's located partially outside the viewport.`);
@@ -1529,6 +1529,18 @@ test('canvas clipping in iframe', async ({ runAndTrace, page, server }) => {
   await expect(canvas).toHaveAttribute('title', `Playwright displays canvas contents on a best-effort basis. It doesn't support canvas elements inside an iframe yet. If this impacts your workflow, please open an issue so we can prioritize.`);
 });
 
+test('canvas clipping with overlaying element', { annotation: [{ type: 'issue', description: 'https://github.com/microsoft/playwright/issues/33562' }] }, async ({ runAndTrace, page, server, browserName }) => {
+  test.fixme(browserName === 'firefox', 'firefox doesnt handle the screenshot test well');
+
+  const traceViewer = await runAndTrace(async () => {
+    await page.goto(server.PREFIX + '/screenshots/canvas-with-overlay.html');
+    await rafraf(page, 5);
+  });
+
+  const snapshot = await traceViewer.snapshotFrame('page.evaluate');
+  await expect(snapshot.owner()).toHaveScreenshot();
+});
+
 test('should show only one pointer with multilevel iframes', async ({ page, runAndTrace, server, browserName }) => {
   test.fixme(browserName === 'firefox', 'Elements in iframe are not marked');
 
diff --git a/tests/library/trace-viewer.spec.ts-snapshots/canvas-clipping-with-overlaying-element-1-chromium.png b/tests/library/trace-viewer.spec.ts-snapshots/canvas-clipping-with-overlaying-element-1-chromium.png
new file mode 100644
index 0000000000..c0c2f59f26
Binary files /dev/null and b/tests/library/trace-viewer.spec.ts-snapshots/canvas-clipping-with-overlaying-element-1-chromium.png differ
diff --git a/tests/library/trace-viewer.spec.ts-snapshots/canvas-clipping-with-overlaying-element-1-webkit.png b/tests/library/trace-viewer.spec.ts-snapshots/canvas-clipping-with-overlaying-element-1-webkit.png
new file mode 100644
index 0000000000..16f542aabc
Binary files /dev/null and b/tests/library/trace-viewer.spec.ts-snapshots/canvas-clipping-with-overlaying-element-1-webkit.png differ