diff --git a/arq/worker.py b/arq/worker.py
index f1e613c9..6058f66a 100644
--- a/arq/worker.py
+++ b/arq/worker.py
@@ -617,7 +617,7 @@ async def job_failed(exc: BaseException) -> None:
                 finish = True
                 self.aborting_tasks.remove(job_id)
                 self.jobs_failed += 1
-            elif self.retry_jobs and isinstance(e, (asyncio.CancelledError, RetryJob)):
+            elif self.retry_jobs and isinstance(e, (asyncio.CancelledError, asyncio.TimeoutError, RetryJob)):
                 logger.info('%6.2fs ↻ %s cancelled, will be run again', t, ref)
                 self.jobs_retried += 1
             else:
diff --git a/tests/test_worker.py b/tests/test_worker.py
index 93fbc7f0..38e5e124 100644
--- a/tests/test_worker.py
+++ b/tests/test_worker.py
@@ -974,18 +974,19 @@ async def test_job_timeout(arq_redis: ArqRedis, worker, caplog):
     async def longfunc(ctx):
         await asyncio.sleep(0.3)
 
-    caplog.set_level(logging.ERROR)
+    caplog.set_level(logging.INFO)
     await arq_redis.enqueue_job('longfunc', _job_id='testing')
     worker: Worker = worker(functions=[func(longfunc, name='longfunc')], job_timeout=0.2, poll_delay=0.1)
     assert worker.jobs_complete == 0
     assert worker.jobs_failed == 0
     assert worker.jobs_retried == 0
+    assert worker.retry_jobs
     await worker.main()
     assert worker.jobs_complete == 0
     assert worker.jobs_failed == 1
-    assert worker.jobs_retried == 0
+    assert worker.jobs_retried == worker.max_tries
     log = re.sub(r'\d+.\d\ds', 'X.XXs', '\n'.join(r.message for r in caplog.records))
-    assert 'X.XXs ! testing:longfunc failed, TimeoutError:' in log
+    assert f'X.XXs ! testing:longfunc max retries {worker.max_tries} exceeded' in log
 
 
 async def test_on_job(arq_redis: ArqRedis, worker):