diff --git a/packages/asset-swapper/CHANGELOG.json b/packages/asset-swapper/CHANGELOG.json
index de866ec49d..a81c159b06 100644
--- a/packages/asset-swapper/CHANGELOG.json
+++ b/packages/asset-swapper/CHANGELOG.json
@@ -14,6 +14,10 @@
             {
                 "note": "Add LUSD Curve pool",
                 "pr": 218
+            },
+            {
+                "note": "Fix exchangeProxyGasOverhead for fallback path",
+                "pr": 215
             }
         ]
     },
diff --git a/packages/asset-swapper/src/utils/market_operation_utils/index.ts b/packages/asset-swapper/src/utils/market_operation_utils/index.ts
index 8642ce0c62..709e2a77fa 100644
--- a/packages/asset-swapper/src/utils/market_operation_utils/index.ts
+++ b/packages/asset-swapper/src/utils/market_operation_utils/index.ts
@@ -560,7 +560,12 @@ export class MarketOperationUtils {
             // We create a fallback path that is exclusive of Native liquidity
             // This is the optimal on-chain path for the entire input amount
             const nonNativeFills = fills.filter(p => p.length > 0 && p[0].source !== ERC20BridgeSource.Native);
-            const nonNativeOptimalPath = await findOptimalPathAsync(side, nonNativeFills, inputAmount, opts.runLimit);
+            const nonNativeOptimalPath = await findOptimalPathAsync(side, nonNativeFills, inputAmount, opts.runLimit, {
+                ...penaltyOpts,
+                exchangeProxyOverhead: (sourceFlags: number) =>
+                    // tslint:disable-next-line: no-bitwise
+                    penaltyOpts.exchangeProxyOverhead(sourceFlags | optimalPath.sourceFlags),
+            });
             // Calculate the slippage of on-chain sources compared to the most optimal path
             if (
                 nonNativeOptimalPath !== undefined &&