In order to solve the influence of the satellite position error on the pulsar position error estimation results, an augmented estimation algorithm for the pulsar position error with satellite position error was proposed. In order to satisfy the observability conditions and ensure the lowest possible number of matrix operations, the algorithm used the satellite's position error scalar as the augmented state. Combined with the basic principle of the pulsar position error estimation, the state equation and the observation equation of the augmented algorithm were deduced again. Furthermore, the theoretical analysis proved the observability of the algorithm. The simulation results show that when the position error of the satellite causes the estimation of the traditional algorithm to deviate greatly, the algorithm can still guarantee the 0.01 mas accuracy of right ascension and 0.3 masaccuracy of declination. The position errors in different directions have less effect on the accuracy of the estimation results.