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Based on the subdomain field model accounting for tooth-tips, the eddy current losses in magnets are calculated for surface-mounted permanent magnet machines. The contributions of both self action of each harmonic and mutual interaction between field harmonics of different orders to magnet loss are accounted for in the developed model. It allows for predicting magnet losses due to the open-circuit, armature reaction and load fields. By using the model, the influence of the slots, tooth-tips, tooth body shape, and current angle on the magnet loss is studied and the mutual interaction between field harmonics of different order are analysed. Extensive finite element analysis demonstrates excellent accuracy of the developed analytical model.