The paper presents an analytical model for predicting the open-circuit magnet eddy-current loss due to slotting in surface-mounted permanent-magnet machines based on the exact subdomain field model. The spatial and temporal characteristics of field harmonics due to slotting and corresponding eddy-current harmonics in the magnet are analyzed in both stator and rotor reference frames. The contribution of interaction between eddy-current harmonics having the same frequency but different spatial order to magnet loss is revealed for the first time by an analytical model. The magnet loss can be under- or overestimated if the interaction is neglected. The developed model is capable of providing both high accuracy and insights of loss generation. The influence of the slot and pole number combination, slot-opening to slot-pitch ratio, pole-arc to pole-pitch ratio, circumferential segmentation, and rotational symmetry order on the open-circuit magnet is investigated using the developed model. The finite-element results validate high accuracy of the developed analytical model.