Lift-off variation causes errors in eddy current measurement of non-magnetic plates as well as magnetic plates. For non-magnetic plates, previous work has been carried out to address the issue. In this paper, we follow a similar strategy, but try to reduce the lift-off effect on another index – zero-crossing frequency for magnetic plates. This modified index, termed as the compensated zero-crossing frequency, can be obtained from the measured multi-frequency inductance spectral data using the algorithm we developed in this paper. Since the zero-crossing frequency can be compensated, the permeability of magnetic plates can finally be predicted by deriving the relation between the permeability and zero-crossing frequency from Dodd and Deeds method. We have derived the method through mathematical manipulation and verified it by both simulation and experimental data. The permeability error caused by lift-off can be reduced within 7.5%.