There are a few differences between absolute and incremental rotary encoders. Incremental encoders have output signals that repeat over the full range of motion. When the incremental encoder is turned on, the position of an incremental encoder is not known since the output signals are not unique to any singular position. Once an incremental encoder passes an index, which can be a single- or multi-track design, the position information is absolute from that point forward.

Absolute encoders have a unique value (voltage, binary count, etc) for each mechanical position. When an absolute encoder is turned on, the position of an absolute encoder is known. The similarities of both absolute and incremental encoders are form and the issues of count and directional information. They can be obtained from both absolute and incremental encoders equally.