The invention provides a transformer insertion loss-based reactive compensation user screening method, and belongs to the field of an electric power system. The transformer insertion loss-based reactive compensation user screening method comprises the steps of obtaining user numbers connected to a transformer, and power utilization parameters corresponding to each user number; determining a critical value for reactive compensation according to the power utilization parameters; and if a sample power utilization parameter in the power utilization parameters is higher than the critical value, obtaining a sample user number corresponding to the sample power utilization parameter, wherein a user corresponding to the sample user number is the user needing reactive compensation. By means of determining the critical value needing reactive compensation, the power utilization parameter of the user is compared with the critical value, so that the user needing reactive compensation can be determined consequently. Compared with the prior art, a proper charge mode can be selected according to the actual power utilization condition of the user, so that the electricity expenditure of the user can be lowered.