diff --git a/.pre-commit-config.yaml b/.pre-commit-config.yaml
index 73743f9f..74ac3c16 100644
--- a/.pre-commit-config.yaml
+++ b/.pre-commit-config.yaml
@@ -7,6 +7,7 @@ repos:
     hooks:
       - id: ruff
         args: ["--config", "pyproject.toml"]
+        exclude: "{{cookiecutter.project_slug}}/src/{{cookiecutter.package_name}}"
   - repo: https://github.com/codespell-project/codespell
     rev: v2.2.6
     hooks:
@@ -27,6 +28,7 @@ repos:
       - id: mypy
         args: [--config-file, pyproject.toml]
         additional_dependencies: ["pytest"]
+        exclude: "{{cookiecutter.project_slug}}/src/{{cookiecutter.package_name}}"
   - repo: https://github.com/pre-commit/mirrors-prettier
     rev: v3.0.3
     hooks:
diff --git a/cookiecutter.json b/cookiecutter.json
index 6bf2b668..a3f25cd5 100644
--- a/cookiecutter.json
+++ b/cookiecutter.json
@@ -4,6 +4,7 @@
   "github_username": "{{ cookiecutter.author_name.replace(' ', '-') }}",
   "project_name": "Python Template",
   "project_slug": "{{ cookiecutter.project_name.lower().replace(' ', '-').replace('_', '-') }}",
+  "package_name": "{{ cookiecutter.project_slug.replace('-', '_') }}",
   "project_short_description": "A cookiecutter template with ARC recommendations.",
   "funder": "JBFC: The Joe Bloggs Funding Council",
   "license": ["MIT", "BSD-3", "GPL-3.0"],
diff --git a/tests/conftest.py b/tests/conftest.py
index 10c287e5..8d4ea660 100644
--- a/tests/conftest.py
+++ b/tests/conftest.py
@@ -15,5 +15,7 @@ def project_config():
         as defined in the cookiecutter.json
     """
     return {
-        "project_slug": "cookiecutter_test",
+        "project_name": "Cookiecutter Test",
+        "expected_repo_name": "cookiecutter-test",
+        "expected_package_name": "cookiecutter_test",
     }
diff --git a/tests/test_package_gen.py b/tests/test_package_gen.py
index 19db582e..6738286d 100644
--- a/tests/test_package_gen.py
+++ b/tests/test_package_gen.py
@@ -33,31 +33,34 @@ def test_package_generation(
             "--no-input",
             "--output-dir",
             str(tmp_path),
-            f"project_slug={project_config['project_slug']}",
+            f"project_name={project_config['project_name']}",
         ],
         check=False,
         shell=False,  # noqa: S603
     )
 
-    test_project_dir = tmp_path / project_config["project_slug"]
-
-    # Check parent directory exists
+    # Check project directory exists
+    test_project_dir = tmp_path / project_config["expected_repo_name"]
     assert test_project_dir.exists()
 
-    # Check main files and directories inside parent directory
+    # Check main files and directories inside
     expected_files = [
         "README.md",
         ".pre-commit-config.yaml",
         "LICENSE.md",
         "pyproject.toml",
         "src",
-        Path("src") / project_config["project_slug"],
+        Path("src") / project_config["expected_package_name"],
+        Path("src") / project_config["expected_package_name"] / "__init__.py",
         "tests",
         Path(".github"),
         Path(".github") / "workflows",
     ]
     for f in expected_files:
-        assert (test_project_dir / f).exists()
+        full_path = test_project_dir / f
+        assert (
+            full_path.exists()
+        ), f"Expected file/folder: {full_path}, but didn't find it."
 
     # Need a .git directory in the project root
     subprocess.run(["git", "init", test_project_dir], check=False)  # noqa: S603,S607
diff --git a/{{cookiecutter.project_slug}}/pyproject.toml b/{{cookiecutter.project_slug}}/pyproject.toml
index db6efe55..991d71ad 100644
--- a/{{cookiecutter.project_slug}}/pyproject.toml
+++ b/{{cookiecutter.project_slug}}/pyproject.toml
@@ -130,7 +130,7 @@ pep8-naming.classmethod-decorators = [
 
 [tool.setuptools_scm]
 local_scheme = "no-local-version"
-write_to = "src/{{ cookiecutter.project_slug }}/_version.py"
+write_to = "src/{{ cookiecutter.package_name }}/_version.py"
 
 [tool.tomlsort]
 all = true
diff --git a/{{cookiecutter.project_slug}}/src/{{cookiecutter.project_slug}}/{{cookiecutter.project_slug}}.py b/{{cookiecutter.project_slug}}/src/{{cookiecutter.package_name}}/__init__.py
similarity index 100%
rename from {{cookiecutter.project_slug}}/src/{{cookiecutter.project_slug}}/{{cookiecutter.project_slug}}.py
rename to {{cookiecutter.project_slug}}/src/{{cookiecutter.package_name}}/__init__.py