diff --git a/app/Http/Controllers/Settings/CategoryController.php b/app/Http/Controllers/Settings/CategoryController.php
index bf6c58af..2bba4fbf 100644
--- a/app/Http/Controllers/Settings/CategoryController.php
+++ b/app/Http/Controllers/Settings/CategoryController.php
@@ -76,7 +76,8 @@ class CategoryController extends Controller
 
     private function throwDuplicateCategoryNameValidationException(UniqueConstraintViolationException $exception): never
     {
-        if (! str_contains($exception->getMessage(), 'categories_user_id_name_unique')) {
+        if (! str_contains($exception->getMessage(), 'categories_user_id_name_unique')
+            && ! str_contains($exception->getMessage(), 'categories_user_id_name_active_unique')) {
             throw $exception;
         }
 
diff --git a/app/Http/Requests/Settings/StoreCategoryRequest.php b/app/Http/Requests/Settings/StoreCategoryRequest.php
index f87bb99e..358b6801 100644
--- a/app/Http/Requests/Settings/StoreCategoryRequest.php
+++ b/app/Http/Requests/Settings/StoreCategoryRequest.php
@@ -47,7 +47,8 @@ class StoreCategoryRequest extends FormRequest
                 'string',
                 'max:255',
                 Rule::unique('categories', 'name')
-                    ->where('user_id', auth()->id()),
+                    ->where('user_id', auth()->id())
+                    ->withoutTrashed(),
             ],
             'icon' => ['required', 'string'],
             'color' => [
diff --git a/app/Http/Requests/Settings/UpdateCategoryRequest.php b/app/Http/Requests/Settings/UpdateCategoryRequest.php
index 0ecc21a5..f0964b3d 100644
--- a/app/Http/Requests/Settings/UpdateCategoryRequest.php
+++ b/app/Http/Requests/Settings/UpdateCategoryRequest.php
@@ -48,6 +48,7 @@ class UpdateCategoryRequest extends FormRequest
                 'max:255',
                 Rule::unique('categories', 'name')
                     ->where('user_id', auth()->id())
+                    ->withoutTrashed()
                     ->ignore($this->route('category')),
             ],
             'icon' => ['required', 'string'],
diff --git a/database/migrations/2026_05_28_073203_update_categories_unique_constraint_for_soft_deletes.php b/database/migrations/2026_05_28_073203_update_categories_unique_constraint_for_soft_deletes.php
new file mode 100644
index 00000000..a0d83871
--- /dev/null
+++ b/database/migrations/2026_05_28_073203_update_categories_unique_constraint_for_soft_deletes.php
@@ -0,0 +1,38 @@
+<?php
+
+use Illuminate\Database\Migrations\Migration;
+use Illuminate\Database\Schema\Blueprint;
+use Illuminate\Support\Facades\Schema;
+
+return new class extends Migration
+{
+    /**
+     * Run the migrations.
+     */
+    public function up(): void
+    {
+        Schema::table('categories', function (Blueprint $table) {
+            $table->dropForeign(['user_id']);
+            $table->dropUnique(['user_id', 'name']);
+            $table->boolean('active_unique_marker')
+                ->nullable()
+                ->virtualAs('if(`deleted_at` is null, 1, null)');
+            $table->unique(['user_id', 'name', 'active_unique_marker'], 'categories_user_id_name_active_unique');
+            $table->foreign('user_id')->references('id')->on('users')->cascadeOnDelete();
+        });
+    }
+
+    /**
+     * Reverse the migrations.
+     */
+    public function down(): void
+    {
+        Schema::table('categories', function (Blueprint $table) {
+            $table->dropForeign(['user_id']);
+            $table->dropUnique('categories_user_id_name_active_unique');
+            $table->dropColumn('active_unique_marker');
+            $table->unique(['user_id', 'name']);
+            $table->foreign('user_id')->references('id')->on('users')->cascadeOnDelete();
+        });
+    }
+};
diff --git a/tests/Feature/Settings/CategoryTest.php b/tests/Feature/Settings/CategoryTest.php
index 37032181..827f9674 100644
--- a/tests/Feature/Settings/CategoryTest.php
+++ b/tests/Feature/Settings/CategoryTest.php
@@ -129,24 +129,27 @@ test('different users can create categories with the same name', function () {
     ]);
 });
 
-test('category names from deleted categories remain reserved', function () {
+test('users can recreate a category with the same name after deleting it', function () {
     $user = User::factory()->create();
     $category = Category::factory()->create([
         'user_id' => $user->id,
-        'name' => 'Healthcare',
+        'name' => 'Supermercados',
     ]);
 
     $category->delete();
 
     $response = $this->actingAs($user)->post(route('categories.store'), [
-        'name' => 'Healthcare',
-        'icon' => 'Heart',
-        'color' => 'pink',
+        'name' => 'Supermercados',
+        'icon' => 'ShoppingCart',
+        'color' => 'green',
         'type' => 'expense',
         'cashflow_direction' => 'hidden',
     ]);
 
-    $response->assertSessionHasErrors(['name']);
+    $response->assertRedirect(route('categories.index'));
+
+    expect($user->categories()->where('name', 'Supermercados')->count())->toBe(1)
+        ->and($user->categories()->withTrashed()->where('name', 'Supermercados')->count())->toBe(2);
 });
 
 test('category icon is required', function () {