Resistive leakage current is an important indicator in metal oxide surge arrester (MOA) online monitoring. Traditional capacitive current compensation method ignores the influence of the harmonic voltage, a huge error on the monitoring result is caused. To solve this problem, a harmonic correction and study for MOA online monitoring algorithm based on the relationship between the resistive current and capacitive current at voltage’s zeropoint is proposed. Capacitance of MOA and compensation coefficients of capacitive G are deduced. This method eliminates the influence of the harmonic voltage and improves the extraction accuracy of resistive current. MATLAB simulations show that the error of capacitance C, fundamental resistive current component iR1 and the 3rd harmonic resistive current component iR3 are 10% by this method, which can reduce the influence of harmonic voltage to the monitoring results effectively, reduce the extraction error of resistive current and improve the accuracy of the arrester on line monitoring.