In a scale, a reference detection pattern and a displacement detection pattern are formed. A detection head outputs a reference detection signal, a phase compensation signal, and a displacement detection signal. A signal processing unit generates a reference signal by amplifying one or both of the phase compensation signal and the reference detection signal and adding up them, and detects a position of the detection head relative to the scale. A combined light receiving grating includes a reference detection light receiving grating and a phase compensation light receiving grating disposed so as to be shifted from the reference detection light receiving grating in the measurement direction. A combined light receiving element includes a reference detection light receiving element configured to output the reference detection signal and a phase compensation light receiving element configured to output the phase compensation signal.