The transformers are an integral part of the power system. In transformers, the main consequence of harmonic currents is an increase in losses, mainly in windings, because of the deformation of the leakage fields. Higher losses mean that more heat is generated in the transformer so that the operating temperature increases, leading to deterioration of the insulation and a potential reduction in lifetime. Due to the non-linear loads, the transformers are much affected by the distorted currents and supply voltages which largely reduce its efficiency due to overheating. Nonlinear loads cause harmonics to flow in the power lines which can overload wiring and Many desktops, personal computers present nonlinear loads to the AC supply because of their power supplies design (capacitor input power supply). In power transformers, the main consequence of harmonic currents is an increase in losses, mainly in windings, because of the deformation of the leakage fields. Higher losses mean that more heat is generated in the transformer so that the operating temperature increases, leading to deterioration of the insulation and a potential reduction in lifetime. As a result, it is necessary to reduce the maximum power load on the transformer, a practice referred to as de-rating, or to take extra care in the design of the transformer to reduce these losses. To estimate the de-rating of the transformer, the load’s K Factor may be used. Thus analyzing this problem and reducing the losses of the transformer has become a major area of research in today’s scenario. This report includes the effects of non-sinusoidal supply voltage on the transformer excitation current and the core losses which includes eddy current and hysteresis losses.