This paper proposes a compensation algorithm of analog rotor position errors due to nonideal sinusoidal encoder signals. The position sensors such as resolvers or incremental encoders are being replaced by sinusoidal encoders that offer much higher resolution. However, the periodic position errors are generated by the gain and offset errors between sine and cosine signals. In this paper, the effects of the gain and offset errors are analyzed by using dq-axis component. The analog position errors can be easily corrected by integral operation of the d-axis component. Therefore, the proposed algorithm does not need additional hardware and much computation time. The validity of the proposed algorithm is verified through experimental results.