A percentage current differential relay is widely used for transformer protection. Because many percentage current differential relays recently use modified methods instead of conventional methods for deciding the operating characteristics of the large current region, in this paper, the operating region of a percentage current differential relay is analyzed in input-output current domain instead of operating-restraint current domain. An effective method to set the operating region when a CT is saturated is proposed with a series of investigations comparing a conventional method with the proposed modified method. The performance of the proposed method is evaluated for internal and external faults of a power transformer having the voltage rating of 345/154kV. EMTP-RV is used for the relaying data collection.