The present invention discloses a parameter algorithm test system based on IEC61850 sampling values and a method thereof. The test system comprises a computer, an IEC61850 protocol data message generator, a data message analysis meter, an electrical parameter measurement device and a high precision timer. The IEC61850 protocol data message generator is configured to be a virtual signal generator outputting measured value message according to the time sequence and according to the IEC61850 protocol; and the data message analysis meter is configured to be a data analyzer for analyzing the data message generated by the IEC61850 protocol data message generator and for determining whether sampling values are correct or not. The parameter algorithm test system based on the IEC61850 sampling values and the method thereof provided by the invention may be capable of verifying the precision and the resolution ratio of the electrical parameter algorithm in the sinusoidal periodic signal and verifying the precision of the electrical parameter algorithm and the precision of the electric energy integrating in the non-sinusoidal periodic signal. The parameter algorithm test system is used for detecting the precision of the algorithm on the basis of the IEC61850 data model so that the influence of the time factor is eliminated and the test process is simplified.