A readout circuit for a sensor and a readout method thereof are provided. The readout circuit includes a reference circuit, a compensated circuit, and a signal processing circuit. The reference circuit provides a direct current (DC) signal. The compensated circuit is coupled to the reference circuit. The compensated circuit obtains an analog sensing signal of the sensor, obtains the DC signal from the reference circuit, and provides a compensated signal according to the analog sensing signal and the DC signal. The signal processing circuit is coupled to the compensated circuit. The signal processing circuit processes the compensated signal to convert the compensated signal into a digital sensing signal. The compensated circuit subtracts the DC signal from the analog sensing signal to provide the compensated signal.