A damage test method is developed to characterize the damage behavior of the bond pad stack structure of an integrated circuit chip. The test method uses a micromechanical test machine (MTM) for an indentation test and an acoustic emission sensor for the bond pad stack crack or damage detection. This would bring about the need for considering the effects of the sensor and others on the total compliance. Previous works have not considered or were unable to consider these effects, and a linear elastic behavior is usually assumed for the load frame compliance compensation. As a result, this may provide a significant error in calculating the indentation displacement and damage energy. In this paper, a detailed compliance test, analysis, and compensation technique of a damage test system are presented, where the nonlinear elastic behavior effect is considered. It is found that the compliance test is independent of the loading rate but dependent on the maximum load applied, where a nonlinear elastic behavior of the system compliance is observed at a higher indentation load. In order to avoid erroneous calculation in the indentation displacement and damage energy of the evaluated specimen in the damage test, a nonlinear elastic behavior of the system compliance has to be considered. This could be essential for any MTM integrated with external sensing elements and fixtures.