Abstract The most monitoring techniques of metal oxide surge arresters are based on harmonics analysis of resistive leakage current. Therefore, the extraction of resistive component from total leakage current is required. Up to now, several methods have been proposed for resistive leakage current extraction such as time-delay addition method. This method is only able to separate accurate resistive component under pure sinusoidal applied voltage. An improved time-delay addition method is proposed in this paper which is able to extract surge arrester resistive component under applied harmonic voltage. To accomplish this purpose, experimental tests have been performed on 20 kV surge arrester and obtained voltage and leakage current signals have been applied to the proposed and previous algorithms for resistive component extraction. In addition to investigate the ability of proposed algorithm, a typical surge arrester has been simulated in ATP-EMTP software and total leakage currents have been applied to both algorithms for resistive leakage current extraction. Results show that the proposed method is able to extract resistive component under applied harmonic voltage more accurate than previous one. Therefore, it is an improvement with respect to previous one that only works for sinusoidal voltage.