This paper presents an online smart meter measurement error estimation algorithm. Extended Kalman filter (EKF) and limit memory recursive least square (LMRLS) methods are used for remote calibration of a large amount of user-side smart meters. Then, a modified joint estimation model is obtained by selecting the estimation step that conforms to the actual working condition and filtering the abnormal estimation value according to the line loss rate characteristics. Finally, based on the experimental data obtained by the program-controlled load simulation system, the precision of metering error estimation is verified. The results show that the method improves the precision of error estimation by analyzing the coupling between line loss rates and metering error estimation. By using the limited memory RLS algorithm, the influence of old measured data on error parameter estimation is reduced so that new data can be added to correct error parameter estimation to enhance the precision of the real-time smart meter error estimation.