Abstract The premise of equivalent linearization method is that the peak response of an inelastic system can be estimated as the peak response of a linear elastic system having reduced stiffness and increased damping. Different approaches have been used to determine the properties of the equivalent linear system, in particular the equivalent damping ratio. In general, equivalent damping is specified as the sum of elastic and hysteretic component, where the former is assumed to be constant, and the latter depends on the ductility and hysteresis model. It is found that, however, many studies only focus on the definition of hysteretic damping and omit the influence of elastic damping on the prediction accuracy of equivalent linearization method. Motivated by this limitation, comprehensive parametric analysis is performed in this paper based on bilinear hysteretic SDOF systems to identify the influence of elastic damping. Results show that elastic damping has significant influence on the estimation accuracy of equivalent linearization method. To improve the estimation accuracy of equivalent linearization method, improved method of equivalent damping is proposed by considering the influence of elastic damping. It is found that the proposed method is able to provide accurate and conservative values of equivalent damping for practical design of base isolation systems.