diff --git a/vp8/encoder/onyx_if.c b/vp8/encoder/onyx_if.c
index 7c079759971feb7002b195db3a7e03dc8421eb8a..4b60cfd3291c3969ec0cd4e55518b19fd702ee63 100644
--- a/vp8/encoder/onyx_if.c
+++ b/vp8/encoder/onyx_if.c
@@ -3574,7 +3574,8 @@ static void encode_frame_to_data_rate
                 for (i=cpi->current_layer+1; i<cpi->oxcf.number_of_layers; i++)
                 {
                     LAYER_CONTEXT *lc = &cpi->layer_context[i];
-                    lc->bits_off_target += cpi->av_per_frame_bandwidth;
+                    lc->bits_off_target += (int)(lc->target_bandwidth /
+                                                 lc->framerate);
                     if (lc->bits_off_target > lc->maximum_buffer_size)
                         lc->bits_off_target = lc->maximum_buffer_size;
                     lc->buffer_level = lc->bits_off_target;
diff --git a/vp8/encoder/ratectrl.c b/vp8/encoder/ratectrl.c
index 1e8259cf488dd2fbd0ecd98c68a50656254c429e..fe4db13b39830c99c9e8fb58dc37c610bd1efa46 100644
--- a/vp8/encoder/ratectrl.c
+++ b/vp8/encoder/ratectrl.c
@@ -956,6 +956,21 @@ static void calc_pframe_target_size(VP8_COMP *cpi)
             if (cpi->bits_off_target > cpi->oxcf.maximum_buffer_size)
               cpi->bits_off_target = (int)cpi->oxcf.maximum_buffer_size;
             cpi->buffer_level = cpi->bits_off_target;
+
+            if (cpi->oxcf.number_of_layers > 1) {
+              unsigned int i;
+
+              // Propagate bits saved by dropping the frame to higher layers.
+              for (i = cpi->current_layer + 1; i < cpi->oxcf.number_of_layers;
+                  i++) {
+                LAYER_CONTEXT *lc = &cpi->layer_context[i];
+                lc->bits_off_target += (int)(lc->target_bandwidth /
+                                             lc->framerate);
+                if (lc->bits_off_target > lc->maximum_buffer_size)
+                  lc->bits_off_target = lc->maximum_buffer_size;
+                lc->buffer_level = lc->bits_off_target;
+              }
+            }
         }
     }