By applying electromagnetic diffusion equation, skin effect in electrical steel sheets in the condition of alternating excitation is analyzed based on Maxwell electromagnetic field theory in this paper. Due to skin effect is more significant mainly at high frequency, non-dimensionalized treatment for the diffusion equation is produced and eddy current loss is calculated by considering and not considering skin effect, respectively. Meanwhile, broadband magnetic losses and separation of a kind of typical electrical steel are obtained by using a 3D magnetic properties testing system to bring to light the emergence of skin effect under rotational excitation. The simplification of magnetic constitutive equation is proposed and introduced into the diffusion equation, which is solved by employing finite elements coupled to Fredholm’s equation. An approximate expression for the rotational eddy current loss component with skin effect is eventually written.