diff --git a/.changeset/rails-excluded-exceptions-chain.md b/.changeset/rails-excluded-exceptions-chain.md
new file mode 100644
index 00000000..9019afa2
--- /dev/null
+++ b/.changeset/rails-excluded-exceptions-chain.md
@@ -0,0 +1,5 @@
+---
+"posthog-rails": minor
+---
+
+Excluded exceptions now also match subclasses of a listed class and any exception whose cause chain contains one, for both `excluded_exceptions` and the built-in defaults. For example an error raised while rescuing `ActiveRecord::RecordNotFound` is no longer captured. ActiveJob captures now respect the exclusion list too.
diff --git a/posthog-rails/examples/posthog.rb b/posthog-rails/examples/posthog.rb
index fc0b3515..b7290a93 100644
--- a/posthog-rails/examples/posthog.rb
+++ b/posthog-rails/examples/posthog.rb
@@ -48,7 +48,8 @@
   # config.current_user_resolver = proc { |controller| controller.current_user }
 
   # Additional exception classes to exclude from reporting
-  # These are added to the default excluded exceptions
+  # These are added to the default excluded exceptions. Subclasses of a listed
+  # class are excluded too, and so is any exception whose cause chain contains one.
   # config.excluded_exceptions = [
   #   # 'MyCustom404Error',
   #   # 'MyCustomValidationError'
diff --git a/posthog-rails/lib/generators/posthog/templates/posthog.rb b/posthog-rails/lib/generators/posthog/templates/posthog.rb
index b67573a3..03ccc2e8 100644
--- a/posthog-rails/lib/generators/posthog/templates/posthog.rb
+++ b/posthog-rails/lib/generators/posthog/templates/posthog.rb
@@ -49,7 +49,8 @@
   # config.current_user_resolver = proc { |controller| controller.current_user }
 
   # Additional exception classes to exclude from reporting
-  # These are added to the default excluded exceptions
+  # These are added to the default excluded exceptions. Subclasses of a listed
+  # class are excluded too, and so is any exception whose cause chain contains one.
   # config.excluded_exceptions = [
   #   # 'MyCustom404Error',
   #   # 'MyCustomValidationError'
diff --git a/posthog-rails/lib/posthog/rails/active_job.rb b/posthog-rails/lib/posthog/rails/active_job.rb
index 4a7f78fd..8b00f86d 100644
--- a/posthog-rails/lib/posthog/rails/active_job.rb
+++ b/posthog-rails/lib/posthog/rails/active_job.rb
@@ -178,7 +178,6 @@ def capture_posthog_retry(exception)
         config = PostHog::Rails.config
         return unless config&.auto_instrument_active_job && config.report_active_job_retries && exception
         return unless PostHog.initialized? && PostHog.client.enabled?
-        return if excluded_posthog_retry?(exception, config)
 
         Internal::Context.with_context(
           @posthog_execution_context || posthog_job_context, fresh: true, enrich_current_span: false
@@ -189,20 +188,9 @@ def capture_posthog_retry(exception)
         PostHog::Logging.logger.error("Failed to capture job retry: #{e.class}")
       end
 
-      def excluded_posthog_retry?(exception, config)
-        seen = {}.compare_by_identity
-        current = exception
-        while current && seen.size < PostHog::ExceptionCapture::MAX_CHAINED_EXCEPTIONS && !seen.key?(current)
-          return true unless config.should_capture_exception?(current)
-
-          seen[current] = true
-          current = current.respond_to?(:cause) ? current.cause : nil
-        end
-        false
-      end
-
       def capture_job_exception(exception, retry_failure: false)
         return unless PostHog::Rails.config&.auto_instrument_active_job
+        return unless PostHog::Rails.config&.should_capture_exception?(exception)
 
         # Build distinct_id from job arguments if possible
         distinct_id = if @posthog_execution_context
diff --git a/posthog-rails/lib/posthog/rails/configuration.rb b/posthog-rails/lib/posthog/rails/configuration.rb
index 2b3bd025..090d3d8c 100644
--- a/posthog-rails/lib/posthog/rails/configuration.rb
+++ b/posthog-rails/lib/posthog/rails/configuration.rb
@@ -4,6 +4,8 @@
 # Copyright (c) 2020 Sentry
 # Licensed under the MIT License: https://github.com/getsentry/sentry-ruby/blob/master/LICENSE
 
+require 'posthog/exception_capture'
+
 module PostHog
   module Rails
     class Configuration
@@ -23,7 +25,8 @@ class Configuration
       #   Defaults to false.
       attr_accessor :report_active_job_retries
 
-      # @return [Array<String>] Exception class names to ignore in addition to the defaults.
+      # @return [Array<String>] Exception class names to ignore in addition to the defaults. Subclasses are
+      #   ignored too, and so is any exception whose cause chain contains a listed class.
       attr_accessor :excluded_exceptions
 
       # @return [Boolean] Whether to use PostHog tracing headers for request-scoped identity/session context.
@@ -117,8 +120,10 @@ def default_excluded_exceptions
       # @param exception [Exception] The exception to check.
       # @return [Boolean] Whether the exception should be captured.
       def should_capture_exception?(exception)
-        exception_name = exception.class.name
-        !all_excluded_exceptions.include?(exception_name)
+        excluded = all_excluded_exceptions
+        exception_chain(exception).none? do |error|
+          error.class.ancestors.any? { |ancestor| excluded.include?(ancestor.name) }
+        end
       end
 
       private
@@ -126,6 +131,15 @@ def should_capture_exception?(exception)
       def all_excluded_exceptions
         default_excluded_exceptions + excluded_exceptions
       end
+
+      def exception_chain(exception)
+        chain = []
+        while exception.is_a?(Exception) && chain.size < ExceptionCapture::MAX_CHAINED_EXCEPTIONS
+          chain << exception
+          exception = exception.cause
+        end
+        chain
+      end
     end
   end
 end
diff --git a/spec/posthog/rails/configuration_spec.rb b/spec/posthog/rails/configuration_spec.rb
index b7064bcc..41201b10 100644
--- a/spec/posthog/rails/configuration_spec.rb
+++ b/spec/posthog/rails/configuration_spec.rb
@@ -38,6 +38,20 @@
       # defaults still apply
       expect(config.should_capture_exception?(ActionController::RoutingError.new('x'))).to be false
     end
+
+    it 'excludes subclasses of an excluded class' do
+      config.excluded_exceptions = ['MyApp::IgnorableError']
+      stub_const('MyApp::IgnorableError', Class.new(StandardError))
+      expect(config.should_capture_exception?(Class.new(MyApp::IgnorableError).new)).to be false
+    end
+
+    it 'excludes an exception whose cause chain contains an excluded class' do
+      config.excluded_exceptions = ['MyApp::IgnorableError']
+      stub_const('MyApp::IgnorableError', Class.new(StandardError))
+      wrapper = StandardError.new('retrying')
+      wrapper.define_singleton_method(:cause) { MyApp::IgnorableError.new('over limit') }
+      expect(config.should_capture_exception?(wrapper)).to be false
+    end
   end
 
   describe 'user context defaults' do
diff --git a/spec/posthog/rails/exception_mechanism_spec.rb b/spec/posthog/rails/exception_mechanism_spec.rb
index 59415c67..d6a1dc40 100644
--- a/spec/posthog/rails/exception_mechanism_spec.rb
+++ b/spec/posthog/rails/exception_mechanism_spec.rb
@@ -376,6 +376,15 @@ def perform_now
       )
     end
 
+    it 'skips job exceptions listed in excluded_exceptions' do
+      PostHog::Rails.config.auto_instrument_active_job = true
+      PostHog::Rails.config.excluded_exceptions = ['StandardError']
+
+      expect { job_class.new.perform_now }.to raise_error(StandardError, 'job failed')
+
+      expect(PostHog).not_to have_received(:capture_exception)
+    end
+
     it 'prevents Rails error subscriber from capturing the same job exception again' do
       PostHog::Rails.config.auto_instrument_active_job = true
       error = nil