The study of new digital algorithm of over-load protection is meaningful to improve the efficiency of the over-load protection validity. This paper establishes a mathematical model for the dynamic over-load protection, based on the heat balance differential equation, to determine how temperature increases with the change of the protection object's current. Different from the common inverse time characteristic, this model conforms to the load actual operating law and the protection request.Wavelet analysis, as a new kind of time-frequency representation technique, has been applied widely in different engineering practice. To solve the problem of the full-wave Fourier algorithm which is disable to filter decaying DC component and has worse frequency characteristic, it is presented an algorithm depending on the combination of subtraction filter and full-wave Morlet complex wavelet amplitude algorithm. It can filter efficiently decaying DC component, has clear frequency characteristic, and make calculation with high precision.