Because tension infiltrometers apply water through a disk of finite size, the infiltrated water moves laterally as well as downward. Only the vertical component of this flow is indicative of the hydraulic conductivity K, so the algorithm for computing K must include a way of isolating that component from the total flow. Some commonly used formulas correct for the multidimensional effects by subtracting an estimate of the laterally spreading flow. For disks smaller than about 200 mm in diameter, however, lateral spreading constitutes so much of the total flow that these subtractive formulas lose considerable accuracy, and sometimes overcorrect so severely as to produce a negative number for K. Other methods rely on empiricisms that are not completely consistent with unsaturated-flow theory and that require prior knowledge of certain soil properties. We developed a new formula that uses a multiplicative factor instead of a subtracted term to achieve the needed correction. For testing we conducted numerical experiments with synthetic data produced by solving the Richardson-Richards equation using the code VS2DRTI, for diverse media and a range of disk sizes, including the widely used 45-mm diameter. We compared K values calculated from our formula to the actual K used to generate the simulated data, as well as to results from other published formulas. This comparison shows that our method provides an algorithm based in unsaturated-flow theory that produces more reliable values for small disks without requiring prior knowledge of soil properties.