Defect detection in ferromagnetic substrates is often hampered by non-magnetic coating thickness variation when using conventional eddy current testing technique. The lift-off distance between the sample and the sensor is one of the main obstacles for the thickness measurement of non-magnetic coatings on ferromagnetic substrates when using the eddy current testing technique. Based on the eddy current thin-skin effect and the lift-off insensitive inductance (LII), a simplified iterative algorithm is proposed for reducing the lift-off variation effect using a multi-frequency sensor. Compared to the previous techniques on compensating the lift-off error (e.g., the lift-off point of intersection) while retrieving the thickness, the simplified inductance algorithms avoid the computation burden of integration, which are used as embedded algorithms for the online retrieval of lift-offs via each frequency channel. The LII is determined by the dimension and geometry of the sensor, thus eliminating the need for empirical calibration. The method is validated by means of experimental measurements of the inductance of coatings with different materials and thicknesses on ferrous substrates (dual-phase alloy). The error of the calculated coating thickness has been controlled to within 3 % for an extended lift-off range of up to 10 mm.