A photoelectric encoder includes a light-emitting element, a scale, a lens, a PDA, and a signal processing circuit. The signal processing circuit includes a distortion table, a distortion compensation circuit, and a position analyzing circuit. The distortion table is calculated in advance on the basis of pieces of distortion information that were obtained by a distortion simulation using design values of the optical system such as the lens. The distortion compensation circuit corrects a light/dark signal of the PDA by eliminating distortion caused by the optical system by changing the positions of the respective PDs of the PDA virtually on the basis of the distortion table and the pieces of position information of the respective PDs. The position analyzing circuit analyzes a position of the scale on the basis of the corrected light/dark signal.