A conventional variable percentage current differential relaying algorithm for bus protection may misoperate for external faults with severe CT saturation and internal faults with high impedance. This paper proposes a percentage differential current relaying algorithm for bus protection combined with a compensating algorithm of secondary currents of CTs. Even though CTs are saturated and their secondary currents are severely distorted, the proposed relaying algorithm does not only misoperate for external faults with CT saturation but also detects the internal faults with high fault impedance. Thus, the method improves the sensitivity of the relays and does not require any counterplan for CT saturation.