diff --git a/src/cli/commands/monitor/index.ts b/src/cli/commands/monitor/index.ts
index 4bbdafae21..a242792e94 100644
--- a/src/cli/commands/monitor/index.ts
+++ b/src/cli/commands/monitor/index.ts
@@ -50,6 +50,7 @@ import { getFormattedMonitorOutput } from '../../../lib/ecosystems/monitor';
 import { processCommandArgs } from '../process-command-args';
 import { hasFeatureFlag } from '../../../lib/feature-flags';
 import { PNPM_FEATURE_FLAG } from '../../../lib/package-managers';
+import { normalizeTargetFile } from '../../../lib/normalize-target-file';
 
 const SEPARATOR = '\n-------------------------------------------------------\n';
 const debug = Debug('snyk');
@@ -294,12 +295,15 @@ export default async function monitor(...args0: MethodArgs): Promise<any> {
             maybePrintDepTree(options, projectDeps.depTree);
           }
 
-          const tFile = projectDeps.targetFile || targetFile;
-          const targetFileRelativePath =
-            projectDeps.plugin.targetFile ||
-            (tFile && pathUtil.join(pathUtil.resolve(path), tFile)) ||
-            '';
+          const tFile = normalizeTargetFile(
+            projectDeps,
+            projectDeps.plugin,
+            targetFile,
+          );
 
+          const targetFileRelativePath = tFile
+            ? pathUtil.resolve(pathUtil.resolve(path), tFile)
+            : '';
           const res: MonitorResult = await promiseOrCleanup(
             snykMonitor(
               path,
diff --git a/src/lib/normalize-target-file.ts b/src/lib/normalize-target-file.ts
new file mode 100644
index 0000000000..2a4b65abae
--- /dev/null
+++ b/src/lib/normalize-target-file.ts
@@ -0,0 +1,21 @@
+import type { PluginMetadata } from '@snyk/cli-interface/legacy/plugin';
+import type { ScannedProjectCustom } from './plugins/get-multi-plugin-result';
+import type { ScannedProject } from '@snyk/cli-interface/legacy/common';
+
+/**
+ * Normalizes the target file path for a scanned project across
+ * test and monitor workflows.
+ *
+ * @param {ScannedProject | ScannedProjectCustom} scannedProject - The scanned project containing metadata such as the target file path.
+ * @param {PluginMetadata} plugin - Metadata about the plugin used to scan the project, which may also include the target file path.
+ * @param {string} [fallback=''] - A fallback value to return if neither the scanned project nor the plugin contain a target file path. Defaults to an empty string.
+ *
+ * @returns {string} - The resolved target file path from either the scanned project, plugin, or the provided fallback value if none are available.
+ */
+export function normalizeTargetFile(
+  scannedProject: ScannedProject | ScannedProjectCustom,
+  plugin: PluginMetadata,
+  fallback = '',
+): string {
+  return scannedProject.targetFile || plugin.targetFile || fallback;
+}
diff --git a/src/lib/snyk-test/run-test.ts b/src/lib/snyk-test/run-test.ts
index f303052053..4db89f492b 100644
--- a/src/lib/snyk-test/run-test.ts
+++ b/src/lib/snyk-test/run-test.ts
@@ -85,6 +85,7 @@ import {
   SUPPORTED_MANIFEST_FILES,
 } from '../package-managers';
 import { PackageExpanded } from 'snyk-resolve-deps/dist/types';
+import { normalizeTargetFile } from '../normalize-target-file';
 
 const debug = debugModule('snyk:run-test');
 
@@ -726,8 +727,11 @@ async function assembleLocalPayloads(
       }
 
       // todo: normalize what target file gets used across plugins and functions
-      const targetFile =
-        scannedProject.targetFile || deps.plugin.targetFile || options.file;
+      const targetFile = normalizeTargetFile(
+        scannedProject,
+        deps.plugin,
+        options.file,
+      );
 
       // Forcing options.path to be a string as pathUtil requires is to be stringified
       const targetFileRelativePath = targetFile
diff --git a/test/acceptance/workspace-helper.ts b/test/acceptance/workspace-helper.ts
index 792738ef7d..a689ec0f8f 100644
--- a/test/acceptance/workspace-helper.ts
+++ b/test/acceptance/workspace-helper.ts
@@ -3,6 +3,14 @@ import { readFileSync } from 'fs';
 
 const workspacePath = path.join(__dirname, 'workspaces');
 
+/**
+ * Changes the current working directory to the specified subdirectory within the workspace path.
+ *
+ * @param {string} subdir - The subdirectory to navigate to (optional). If not provided, the workspace path itself will be used.
+ *
+ * @example
+ * chdirWorkspaces('project1'); // Changes the working directory to '${workspacePath}/project1'
+ */
 export function chdirWorkspaces(subdir = '') {
   const dir = path.join(workspacePath, subdir);
   process.chdir(dir);
diff --git a/test/tap/cli-monitor/cli-monitor.all-projects.spec.ts b/test/tap/cli-monitor/cli-monitor.all-projects.spec.ts
index 0a91bf47ed..6641a4c694 100644
--- a/test/tap/cli-monitor/cli-monitor.all-projects.spec.ts
+++ b/test/tap/cli-monitor/cli-monitor.all-projects.spec.ts
@@ -1,6 +1,7 @@
 import * as sinon from 'sinon';
 import * as path from 'path';
 import * as depGraphLib from '@snyk/dep-graph';
+import { getWorkspacePath } from '../../jest/util/getWorkspacePath';
 
 interface AcceptanceTests {
   language: string;
@@ -412,6 +413,9 @@ export const AllProjectsTests: AcceptanceTests = {
                     },
                   },
                   depGraph: simpleGradleGraph,
+                  targetFile:
+                    getWorkspacePath('gradle-monorepo') +
+                    '/subproj/build.gradle',
                 },
               ],
             };
@@ -437,6 +441,7 @@ export const AllProjectsTests: AcceptanceTests = {
           'gradle project was monitored',
         );
 
+        let policyCount = 0;
         const requests = params.server
           .getRequests()
           .filter((req) => req.url.includes('/monitor/'));
@@ -447,6 +452,10 @@ export const AllProjectsTests: AcceptanceTests = {
             /\/api\/v1\/monitor\/(npm\/graph|gradle\/graph)/,
             'puts at correct url',
           );
+
+          if (req.body.policy) {
+            policyCount++;
+          }
           t.notOk(req.body.targetFile, "doesn't send the targetFile");
           t.equal(req.method, 'PUT', 'makes PUT request');
           t.equal(
@@ -455,6 +464,7 @@ export const AllProjectsTests: AcceptanceTests = {
             'sends version number',
           );
         });
+        t.equal(policyCount, 1, '1 nested policy found in monorepo');
       },
     '`monitor kotlin-monorepo --all-projects` scans kotlin files':
       (params, utils) => async (t) => {