This paper presents a new approach of tool wear compensation, based on 'volume removal per discharge' ( VRD ) in 'reverse-micro-electrical-discharge machining'. In this process, a plate with pre-drilled micro-hole is used as a tool, the erosion of which limits the fabrication of desired height of micro-rod(s). Therefore, in order to achieve the dimensional accuracy of this micro-rod(s), such tool plate wear needs to be compensated.Since this approach is based on the real-time estimation of volume removal from workpiece, which is obtained by multiplying the number of 'contributing' pulses with the VRD, therefore, an accurate estimation of VRD is very much essential for availing correct tool wear compensation. In this work, VRD is estimated by considering two new aspects; the number of actual 'contributing' pulses and the variation of VRD with machining depth. These pulses are identified by a 'pulse discriminating' system developed in house. The real-time material removal volume from workpiece is then used to estimate the 'real-time height' of micro-rods after considering the over cut and taperness of each micro-rod. The proposed method is also compared with the normal machining method and 'uniform wear method' and found to be more accurate with a negligible error of maximum 1.7%.