diff --git a/homeassistant/components/daikin/climate.py b/homeassistant/components/daikin/climate.py
index 3d064f47e97..fb708916039 100644
--- a/homeassistant/components/daikin/climate.py
+++ b/homeassistant/components/daikin/climate.py
@@ -118,8 +118,8 @@ async def async_setup_entry(
 
 
 def format_target_temperature(target_temperature):
-    """Format target temperature to be sent to the Daikin unit, taking care of keeping at most 1 decimal digit."""
-    return str(round(float(target_temperature), 1)).rstrip("0").rstrip(".")
+    """Format target temperature to be sent to the Daikin unit, rounding to nearest half degree."""
+    return str(round(float(target_temperature) * 2, 0) / 2).rstrip("0").rstrip(".")
 
 
 class DaikinClimate(ClimateEntity):
diff --git a/tests/components/daikin/test_temperature_format.py b/tests/components/daikin/test_temperature_format.py
index d05efa98b8d..bc085fa1fd8 100644
--- a/tests/components/daikin/test_temperature_format.py
+++ b/tests/components/daikin/test_temperature_format.py
@@ -8,13 +8,13 @@ def test_int_conversion():
     assert formatted == "16"
 
 
-def test_decimal_conversion():
+def test_rounding():
     """Check 1 decimal is kept when target temp is a decimal."""
     formatted = format_target_temperature("16.1")
-    assert formatted == "16.1"
-
-
-def test_decimal_conversion_more_digits():
-    """Check at most 1 decimal is kept when target temp is a decimal with more than 1 decimal."""
-    formatted = format_target_temperature("16.09")
-    assert formatted == "16.1"
+    assert formatted == "16"
+    formatted = format_target_temperature("16.3")
+    assert formatted == "16.5"
+    formatted = format_target_temperature("16.65")
+    assert formatted == "16.5"
+    formatted = format_target_temperature("16.9")
+    assert formatted == "17"