Time grating sensor is a novel sensor and it can achieve very high accuracy owing to a special way that measure time using pulse with high frequency. In this paper, the reasons of signal distortion have been introduced firstly, including the imbalance of amplitude, imperfect quadrature, inductive of harmonics. In particular, aim to the angular deviation from the imbalance of amplitude, the letter introduces the dq transform from electrical machinery to solve it and deduces the angular deviation. The process of measuring is analyzed using rotating coordinate system where an error compensation algorithm has been proposed. The error would be corrected with a simply way due to the fact that the algorithm utilizes the characteristic of signal completely. Finally, the proposed method was applied to the experimental system and the error of sensor was obtained under different circumstances. Experimental results indicate the curve of error consist of 2th harmonic because of the imbalance of amplitude. The deviation of angular information from the imbalance of amplitude will be eliminated if the algorithm is applied .it will get good result with the algorithm and it will be make sense for timegrating sensor.