diff --git a/trl/trainer/sft_trainer.py b/trl/trainer/sft_trainer.py
index 8e0ae98a48..dc70b50a67 100644
--- a/trl/trainer/sft_trainer.py
+++ b/trl/trainer/sft_trainer.py
@@ -1118,7 +1118,8 @@ def compute_loss(
 
         # Set aside labels as it will be dropped by super().compute_loss() if a custom `compute_loss_func` is used.
         # This can be removed when this issue is fixed.
-        labels = inputs["labels"]
+        # When using CP or SP, labels are pre-shifted, we must use shift_labels instead.
+        labels = inputs["labels"] if "shift_labels" not in inputs else None
 
         # If not set, defaults from model config and may warn since cache isn't compatible with gradient checkpointing
         inputs["use_cache"] = False
@@ -1172,7 +1173,7 @@ def compute_loss(
             # Compute accuracy from logits using argmax (traditional method)
             with torch.no_grad():
                 if "shift_labels" in inputs:
-                    # When using CP, labels are pre-shifted. We must use these (and cannot manually shift) because:
+                    # When using CP or SP, labels are pre-shifted. We must use these (and cannot manually shift) because:
                     # - The first discarded token from inputs["labels"] actually belongs to process n-1
                     # - The last logits require the label from process n+1
                     shift_logits = outputs.logits.contiguous()