The rotating period of the pulsars are highly stable, and the measurement of the pulsars can be adopted to correct the clock error of the satellite-borne atomic clock. In order to solve the problem that the minor system bias can largely worsen the performance of the pulsar timing system, an algorithm for the pulsar timing system with the system bias is proposed. Based on the principle of the pulsar timing system, the system bias was modeled. By using the two-stage Kalman filter, the system state and the system bias were decoupled and estimated. The results of the simulations show that the proposed algorithm can effectively reduce the impact of the system bias and can improve the performance of the pulsar timing system. 