In this paper, a new method is proposed to allocate Transmission loss in pool-based electricity markets. This method is based on using the impedance matrix of the network and the admittance equivalent circuit seen from the network buses. After performing load flow equations, the losses of each bus are calculated using the impedance matrix of the network and the reduced admittance matrix and the injected currents from each bus. These losses are properly and fairly shared between network buses for fair loss allocation in proportion to the percent of penetration the currents of each bus. Furthermore, using partial derivatives of the active power losses with respect to the bus currents’ coefficients, a sensitivity analysis has been done for proving the fairness of the proposed method. In addition to its simplicity, the suggested method assigns the losses properly and fairly between the buses. Finally, this method has been tested on a benchmark IEEE 14-bus network, and the results are compared with other existing methods.