In terms of the physical mechanism and features of the dynamic soil-structure interaction during earthquake excitation, a simplified procedure for evaluating the earthquake-induced differential settlement of buildings on natural subsoil is presented. It takes into account of the irregularity of incident seismic waves and the different distribution of vertical dynamic stresses caused by seismic loading under the two sides of building base. Instead of FEM the simplified method based on the layer-wise summation method is used to calculate the settlement of the subsoil with building presence. The cone model proposed by Meek and Wolf is adopted to calculate the dynamic stress distribution under the building. The residual strain potential model of soil under irregular loading and the modulus-softening model are employed to calculate the permanent deformation of subsoil. The simplified method can consider the combined effect of soil, structure and seismic wave reasonably and describe the developing process of differential settlement. The results of large shaking table tests are consistent with the corresponding calculated results.