diff --git a/lua/orgmode/config/init.lua b/lua/orgmode/config/init.lua
index 4bcd91a7c..ee22fc196 100644
--- a/lua/orgmode/config/init.lua
+++ b/lua/orgmode/config/init.lua
@@ -1,5 +1,6 @@
 local instance = {}
 local utils = require('orgmode.utils')
+local fs = require('orgmode.utils.fs')
 local defaults = require('orgmode.config.defaults')
 ---@type table<string, MapEntry>
 local mappings = require('orgmode.config.mappings')
@@ -154,8 +155,10 @@ end
 function Config:get_all_files()
   local all_filenames = {}
   if self.opts.org_default_notes_file and self.opts.org_default_notes_file ~= '' then
-    local default_full_path = vim.fn.resolve(vim.fn.expand(self.opts.org_default_notes_file, ':p'))
-    table.insert(all_filenames, default_full_path)
+    local default_full_path = vim.fn.resolve(vim.fn.fnamemodify(self.opts.org_default_notes_file, ':p'))
+    if vim.loop.fs_stat(default_full_path) then
+      table.insert(all_filenames, default_full_path)
+    end
   end
   local files = self.opts.org_agenda_files
   if not files or files == '' or (type(files) == 'table' and vim.tbl_isempty(files)) then
@@ -317,13 +320,23 @@ function Config:parse_archive_location(file, archive_loc)
   -- TODO: Support archive to headline
   local parts = vim.split(archive_loc, '::')
   local archive_location = vim.trim(parts[1])
-  if archive_location:find('%%s') then
-    local file_path = vim.fn.fnamemodify(file, ':p:h')
-    local file_name = vim.fn.fnamemodify(file, ':t')
-    local archive_filename = string.format(archive_location, file_name)
+  if not archive_location:find('%%s') then
+    return vim.fn.fnamemodify(archive_location, ':p')
+  end
+
+  local file_path = vim.fn.fnamemodify(file, ':p:h')
+  local file_name = vim.fn.fnamemodify(file, ':t')
+  local archive_filename = string.format(archive_location, file_name)
+
+  -- If org_archive_location is defined as relative path (example: "archive/%s_archive")
+  -- then we need to prepend the file path to it
+  local is_full_path = fs.substitute_path(archive_filename)
+
+  if not is_full_path then
     return string.format('%s/%s', file_path, archive_filename)
   end
-  return vim.fn.fnamemodify(archive_location, ':p')
+
+  return vim.fn.fnamemodify(archive_filename, ':p')
 end
 
 function Config:is_archive_file(file)
diff --git a/lua/orgmode/utils/fs.lua b/lua/orgmode/utils/fs.lua
index 2d50e8379..83454079c 100644
--- a/lua/orgmode/utils/fs.lua
+++ b/lua/orgmode/utils/fs.lua
@@ -16,9 +16,8 @@ function M.substitute_path(path_str)
   elseif path_str:match('^%.%./') then
     local base = vim.fn.fnamemodify(utils.current_file_path(), ':p:h')
     return base .. '/' .. path_str
-  else
-    return false
   end
+  return false
 end
 
 ---@param filepath string
diff --git a/tests/plenary/config/config_spec.lua b/tests/plenary/config/config_spec.lua
new file mode 100644
index 000000000..4afa8f44c
--- /dev/null
+++ b/tests/plenary/config/config_spec.lua
@@ -0,0 +1,31 @@
+local orgmode = require('orgmode')
+
+describe('Config', function()
+  local refile_file = vim.fn.getcwd() .. '/tests/plenary/fixtures/refile.org'
+
+  it('should parse an absolute archive location for a file', function()
+    local org = orgmode.setup({
+      org_agenda_files = vim.fn.getcwd() .. '/tests/plenary/fixtures/*',
+      org_default_notes_file = refile_file,
+      org_archive_location = vim.fn.getcwd() .. '/tests/plenary/fixtures/archive/%s_archive::',
+    })
+    local config = require('orgmode.config')
+    assert.are.same(
+      config:parse_archive_location(refile_file),
+      vim.fn.getcwd() .. '/tests/plenary/fixtures/archive/refile.org_archive'
+    )
+  end)
+
+  it('should parse a relative archive location for a file', function()
+    local org = orgmode.setup({
+      org_agenda_files = vim.fn.getcwd() .. '/tests/plenary/fixtures/*',
+      org_default_notes_file = refile_file,
+      org_archive_location = 'archives_relative/%s_archive::',
+    })
+    local config = require('orgmode.config')
+    assert.are.same(
+      config:parse_archive_location(refile_file),
+      vim.fn.getcwd() .. '/tests/plenary/fixtures/archives_relative/refile.org_archive'
+    )
+  end)
+end)