A hybrid electric vehicle and a method for compensating a motor torque thereof, may include a hybrid control unit (HCU) including a processor and a non-transitory storage medium containing instructions executed by the processor. The processor is configured to start motor torque intervention upon entering a predetermined shift phase during shifting, to determine a motor torque compensation amount by reflecting engine torque according to engine torque reduction control, and to perform motor torque compensation control based on the motor torque compensation amount.