The invention discloses a method for processing power headroom and a terminal thereof, wherein the method comprises: when transmitting a physical uplink shared channel (PUSCH) and/or a physical uplink control channel (PUCCH) on subframe i and component carrier group j, the terminal measures power headroom on the subframe i and the component carrier group j; the terminal reports the power headroom to the base station and indicates the type of the reported power headroom when reporting. The invention specifically indicates the type to which the power headroom belongs by reporting the type while reporting the power headroom, thereby avoiding confusion.