As a precision position sensor, the photoelectric encoder has difficulty avoiding eccentricity or tilt error in the industrial manufacturing and assembly process. At present, manual error correction is often used to adjust. The adjustment efficiency is low, and it has difficulty cooperating with other types of error compensation methods. In view of these problems, we proposed a photoelectric encoder eccentricity error detection and compensation method based on digital signal bandpass filtering that effectively corrects the signal deviation caused by the installation eccentricity in the output signal and judges the direction and magnitude of the eccentricity error to realize the encoding correction of eccentricity and inclination error of the device. The mathematical model of the eccentric error generation principle of the photoelectric encoder combined with the Lissajous figure was derived. We then demonstrated the design of a photoelectric encoder error detection platform to detect photoelectric encoders of different diameters in real time. Finally, using the advantages of field programmable gate array high-speed parallel processing, the error compensation algorithm was written into the development chip to improve the efficiency of processing the encoder output error signal. This method can adapt to the eccentricity error correction and compensation of different models of photoelectric encoders and can greatly improve the efficiency and accuracy compared with previous detection methods.