diff --git a/packages/trpc/server/routers/viewer/organizations/handleBannerUpdate.test.ts b/packages/trpc/server/routers/viewer/organizations/handleBannerUpdate.test.ts
new file mode 100644
index 0000000000..1aa2588f65
--- /dev/null
+++ b/packages/trpc/server/routers/viewer/organizations/handleBannerUpdate.test.ts
@@ -0,0 +1,118 @@
+import { describe, expect, it, vi, beforeEach } from "vitest";
+
+import { getBannerUrl } from "./update.handler";
+
+vi.mock("@calcom/lib/server/avatar", () => ({
+  uploadLogo: vi.fn(),
+}));
+
+vi.mock("@calcom/lib/server/resizeBase64Image", () => ({
+  resizeBase64Image: vi.fn((input) => input),
+}));
+
+const { uploadLogo } = await import("@calcom/lib/server/avatar");
+const { resizeBase64Image } = await import("@calcom/lib/server/resizeBase64Image");
+
+describe("getBannerUrl", () => {
+  const mockTeamId = 123;
+
+  beforeEach(() => {
+    vi.clearAllMocks();
+  });
+
+  it("should return undefined when banner is undefined (not provided)", async () => {
+    const result = await getBannerUrl(undefined, mockTeamId);
+
+    expect(result).toBeUndefined();
+    expect(uploadLogo).not.toHaveBeenCalled();
+    expect(resizeBase64Image).not.toHaveBeenCalled();
+  });
+
+  it("should return null when banner is explicitly set to null", async () => {
+    const result = await getBannerUrl(null, mockTeamId);
+
+    expect(result).toBe(null);
+    expect(uploadLogo).not.toHaveBeenCalled();
+    expect(resizeBase64Image).not.toHaveBeenCalled();
+  });
+
+  it("should upload and return URL for valid PNG base64 banner", async () => {
+    const mockBannerUrl = "https://example.com/banner.png";
+    const validBase64 =
+      "data:image/png;base64,iVBORw0KGgoAAAANSUhEUgAAAAEAAAABCAYAAAAfFcSJAAAADUlEQVR42mNkYPhfDwAChwGA60e6kgAAAABJRU5ErkJggg==";
+
+    vi.mocked(uploadLogo).mockResolvedValue(mockBannerUrl);
+
+    const result = await getBannerUrl(validBase64, mockTeamId);
+
+    expect(result).toBe(mockBannerUrl);
+    expect(resizeBase64Image).toHaveBeenCalledWith(validBase64, { maxSize: 1500 });
+    expect(uploadLogo).toHaveBeenCalledWith({
+      logo: validBase64, // resizeBase64Image mock returns input unchanged
+      teamId: mockTeamId,
+      isBanner: true,
+    });
+  });
+
+  it("should upload and return URL for valid JPEG base64 banner", async () => {
+    const mockBannerUrl = "https://example.com/banner.jpg";
+    const validBase64 =
+      "data:image/jpeg;base64,/9j/4AAQSkZJRgABAQEAYABgAAD/2wBDAAEBAQEBAQEBAQEBAQEBAQEBAQEBAQEBAQEBAQEBAQEBAQEBAQEBAQEBAQEBAQEBAQEBAQEBAQEBAQEBAQEBAQH/2wBDAQEBAQEBAQEBAQEBAQEBAQEBAQEBAQEBAQEBAQEBAQEBAQEBAQEBAQEBAQEBAQEBAQEBAQEBAQEBAQEBAQEBAQH/wAARCAABAAEDASIAAhEBAxEB/8QAFQABAQAAAAAAAAAAAAAAAAAAAAv/xAAUEAEAAAAAAAAAAAAAAAAAAAAA/8QAFQEBAQAAAAAAAAAAAAAAAAAAAAX/xAAUEQEAAAAAAAAAAAAAAAAAAAAA/9oADAMBAAIRAxEAPwA/wA==";
+
+    vi.mocked(uploadLogo).mockResolvedValue(mockBannerUrl);
+
+    const result = await getBannerUrl(validBase64, mockTeamId);
+
+    expect(result).toBe(mockBannerUrl);
+    expect(resizeBase64Image).toHaveBeenCalledWith(validBase64, { maxSize: 1500 });
+    expect(uploadLogo).toHaveBeenCalledWith({
+      logo: validBase64,
+      teamId: mockTeamId,
+      isBanner: true,
+    });
+  });
+
+  it("should upload and return URL for valid JPG base64 banner", async () => {
+    const mockBannerUrl = "https://example.com/banner.jpg";
+    const validBase64 =
+      "data:image/jpg;base64,/9j/4AAQSkZJRgABAQEAYABgAAD/2wBDAAEBAQEBAQEBAQEBAQEBAQEBAQEBAQEBAQEBAQEBAQEBAQEBAQEBAQEBAQEBAQEBAQEBAQEBAQEBAQEBAQEBAQH/2wBDAQEBAQEBAQEBAQEBAQEBAQEBAQEBAQEBAQEBAQEBAQEBAQEBAQEBAQEBAQEBAQEBAQEBAQEBAQEBAQEBAQEBAQH/wAARCAABAAEDASIAAhEBAxEB/8QAFQABAQAAAAAAAAAAAAAAAAAAAAv/xAAUEAEAAAAAAAAAAAAAAAAAAAAA/8QAFQEBAQAAAAAAAAAAAAAAAAAAAAX/xAAUEQEAAAAAAAAAAAAAAAAAAAAA/9oADAMBAAIRAxEAPwA/wA==";
+
+    vi.mocked(uploadLogo).mockResolvedValue(mockBannerUrl);
+
+    const result = await getBannerUrl(validBase64, mockTeamId);
+
+    expect(result).toBe(mockBannerUrl);
+    expect(resizeBase64Image).toHaveBeenCalledWith(validBase64, { maxSize: 1500 });
+    expect(uploadLogo).toHaveBeenCalledWith({
+      logo: validBase64,
+      teamId: mockTeamId,
+      isBanner: true,
+    });
+  });
+
+  it("should return undefined for invalid banner string", async () => {
+    const result = await getBannerUrl("invalid-banner-string", mockTeamId);
+
+    expect(result).toBeUndefined();
+    expect(uploadLogo).not.toHaveBeenCalled();
+    expect(resizeBase64Image).not.toHaveBeenCalled();
+  });
+
+  it("should return undefined for empty banner string", async () => {
+    const result = await getBannerUrl("", mockTeamId);
+
+    expect(result).toBeUndefined();
+    expect(uploadLogo).not.toHaveBeenCalled();
+    expect(resizeBase64Image).not.toHaveBeenCalled();
+  });
+
+  it("should return undefined for non-image base64 string", async () => {
+    const invalidBase64 = "data:text/plain;base64,SGVsbG8gV29ybGQ=";
+
+    const result = await getBannerUrl(invalidBase64, mockTeamId);
+
+    expect(result).toBeUndefined();
+    expect(uploadLogo).not.toHaveBeenCalled();
+    expect(resizeBase64Image).not.toHaveBeenCalled();
+  });
+});
diff --git a/packages/trpc/server/routers/viewer/organizations/update.handler.ts b/packages/trpc/server/routers/viewer/organizations/update.handler.ts
index 2bee594150..087d6fc813 100644
--- a/packages/trpc/server/routers/viewer/organizations/update.handler.ts
+++ b/packages/trpc/server/routers/viewer/organizations/update.handler.ts
@@ -15,6 +15,38 @@ import { TRPCError } from "@trpc/server";
 import type { TrpcSessionUser } from "../../../types";
 import type { TUpdateInputSchema } from "./update.schema";
 
+export const getBannerUrl = async (
+  banner: string | null | undefined,
+  teamId: number
+): Promise<string | null | undefined> => {
+  if (banner === undefined) {
+    // Banner not provided, don't update
+    return undefined;
+  }
+
+  if (banner === null) {
+    // Explicitly set to null, remove banner
+    return null;
+  }
+
+  if (
+    banner.startsWith("data:image/png;base64,") ||
+    banner.startsWith("data:image/jpeg;base64,") ||
+    banner.startsWith("data:image/jpg;base64,")
+  ) {
+    // Valid base64 image, resize and upload
+    const resizedBanner = await resizeBase64Image(banner, { maxSize: 1500 });
+    return await uploadLogo({
+      logo: resizedBanner,
+      teamId,
+      isBanner: true,
+    });
+  }
+
+  // Invalid banner string, don't update
+  return undefined;
+};
+
 type UpdateOptions = {
   ctx: {
     user: NonNullable<TrpcSessionUser>;
@@ -185,21 +217,7 @@ export const updateHandler = async ({ ctx, input }: UpdateOptions) => {
     metadata: mergeMetadata({ ...input.metadata }),
   };
 
-  if (
-    input.banner &&
-    (input.banner.startsWith("data:image/png;base64,") ||
-      input.banner.startsWith("data:image/jpeg;base64,") ||
-      input.banner.startsWith("data:image/jpg;base64,"))
-  ) {
-    const banner = await resizeBase64Image(input.banner, { maxSize: 1500 });
-    data.bannerUrl = await uploadLogo({
-      logo: banner,
-      teamId: currentOrgId,
-      isBanner: true,
-    });
-  } else {
-    data.bannerUrl = null;
-  }
+  data.bannerUrl = await getBannerUrl(input.banner, currentOrgId);
 
   if (
     input.logoUrl &&