diff --git a/Assets/settings-default.json b/Assets/settings-default.json
index 2c1e418a..296faf69 100644
--- a/Assets/settings-default.json
+++ b/Assets/settings-default.json
@@ -79,7 +79,7 @@
     "fontFixedScale": 1,
     "tooltipsEnabled": true,
     "panelsAttachedToBar": true,
-    "panelsOverlayLayer": true
+    "panelsOverlayLayer": false
   },
   "location": {
     "name": "Tokyo",
diff --git a/Commons/Settings.qml b/Commons/Settings.qml
index b445ba61..6b2c0766 100644
--- a/Commons/Settings.qml
+++ b/Commons/Settings.qml
@@ -211,7 +211,7 @@ Singleton {
       property real fontFixedScale: 1.0
       property bool tooltipsEnabled: true
       property bool panelsAttachedToBar: true
-      property bool panelsOverlayLayer: true
+      property bool panelsOverlayLayer: false
     }
 
     // location
diff --git a/Widgets/NFullScreenWindow.qml b/Widgets/NFullScreenWindow.qml
index 7c3bb1ec..3dab0798 100644
--- a/Widgets/NFullScreenWindow.qml
+++ b/Widgets/NFullScreenWindow.qml
@@ -44,7 +44,7 @@ PanelWindow {
   // This ensures all keyboard shortcuts work reliably (Escape, etc.)
   // The centralized shortcuts in this window handle delegation to panels
   WlrLayershell.keyboardFocus: root.isPanelOpen ? WlrKeyboardFocus.Exclusive : WlrKeyboardFocus.None
-  WlrLayershell.layer: WlrLayer.Top
+  WlrLayershell.layer: Settings.data.ui.panelsOverlayLayer ? WlrLayer.Overlay : WlrLayer.Top
   WlrLayershell.namespace: "noctalia-screen-" + (screen?.name || "unknown")
 
   anchors {