diff --git a/src/gallium/drivers/panfrost/pan_cmdstream.c b/src/gallium/drivers/panfrost/pan_cmdstream.c
index 0d89e25245b..cdb793e0283 100644
--- a/src/gallium/drivers/panfrost/pan_cmdstream.c
+++ b/src/gallium/drivers/panfrost/pan_cmdstream.c
@@ -4158,7 +4158,16 @@ panfrost_launch_grid(struct pipe_context *pipe,
                                      batch->rsd[PIPE_SHADER_COMPUTE],
                                      panfrost_emit_shared_memory(batch, info));
 
-                cfg.allow_merging_workgroups = cs->info.cs.allow_merging_workgroups;
+                /* Workgroups may be merged if the shader does not use barriers
+                 * or shared memory. This condition is checked against the
+                 * static shared_size at compile-time. We need to check the
+                 * variable shared size at launch_grid time, because the
+                 * compiler doesn't know about that.
+                 */
+                cfg.allow_merging_workgroups =
+                        cs->info.cs.allow_merging_workgroups &&
+                        (info->variable_shared_mem == 0);
+
                 cfg.task_increment = 1;
                 cfg.task_axis = MALI_TASK_AXIS_Z;
         }
diff --git a/src/panfrost/util/pan_ir.h b/src/panfrost/util/pan_ir.h
index 20915a1a6db..8b41668ea66 100644
--- a/src/panfrost/util/pan_ir.h
+++ b/src/panfrost/util/pan_ir.h
@@ -335,7 +335,10 @@ struct pan_shader_info {
 
                 struct {
                         /* Is it legal to merge workgroups? This is true if the
-                         * shader uses neither barriers nor shared memory.
+                         * shader uses neither barriers nor shared memory. This
+                         * requires caution: if the API allows specifying shared
+                         * memory at launch time (instead of compile time), that
+                         * memory will not be accounted for by the compiler.
                          *
                          * Used by the Valhall hardware.
                          */