Method and system for estimating voltage of a battery element

A method for estimating the voltage of a battery element of a battery system is provided. In one embodiment, the method comprises providing a balancing/sensing circuit having a series combination of a balancing switch and a balancing resistive element electrically connected in parallel with the battery element, and measuring the voltage across the balancing switch/balancing resistive element combination when the switch is presumed to be in a "closed" state." The method further comprises deriving a compensated value for the measured voltage by applying a calculated compensation factor to the measured voltage, the compensated value compensating for a voltage drop occurring in the balancing/sensing circuit when the balancing switch is in the "closed" state and represents an estimate of the battery element voltage. A battery system is also provided that includes a battery element, a balancing/sensing circuit, a sensor, and a control module configured to perform the method described above.