Abstract-In this paper, magnetic material was applied in the design of a UHF-RFID metal tag to increase the reading distance. The influence of the electromagnetic properties, especially the electromagnetic loss, of a magnetic substrate on the gain of the tag antenna is discussed by analyzing the reflection and the surface current distribution. As to folded antenna, the loss of energy caused by the magnetic substrate tends to occur in the folding edge of the antenna. Both simulations and experiments indicate that electromagnetic loss markedly reduces the gain rapidly when both the dielectric loss tangent (tan δ) and the magnetic loss tangent (tan δm) are between 0 and 0.3. The reading distance drops from 3 m to 1.5 m when the tan δm of the magnetic composite substrate increases from 0.009 to 0.023. And tan δm should be less than 0.1 for the antenna working excellently. The conclusion offers meaningful guidance for future studies of magnetic substrate folded metal tag.