The transformer does not require any moving parts to transfer energy. This means that there are no friction or windage losses associated with other motors. However, transformers do suffer from other types of losses, called "copper losses" and "iron losses", but usually these losses are very small.

Copper loss, also known as I 2 R loss, is the power lost in heat due to circulating current around the copper windings of the transformer, hence the name. Copper loss represents the maximum loss in transformer operation. The actual wattage of power loss can be determined (in each winding) by squaring the ampere and multiplying it by the winding resistance in ohms (I 2 R ).

Iron loss, also called hysteresis, is a phenomenon in which the magnetic molecules in the magnetic core lag behind in response to the alternating magnetic flux. This hysteresis (or out-of-phase) condition is due to the fact that it requires electricity to reverse the magnetic molecules; they will not reverse until the flux reaches a force sufficient to make them reverse.

Their reversal will cause friction, and friction will generate heat in the core, which is a power loss. By manufacturing the iron core with a special steel alloy, the hysteresis in the transformer can be reduced.

The strength of the power loss in the transformer determines its efficiency. The efficiency of a transformer is reflected in the power (wattage) loss between the primary (input) and secondary (output) windings. Then the final efficiency of the transformer is equal to the ratio of the power output PS of the secondary winding to the power input PP of the primary winding, so it is high.

The ideal transformer efficiency is 100%, transferring all the electrical energy received by its primary side to the secondary side. On the other hand, real transformers are not 100% efficient. When operating at full capacity, their maximum efficiency is close to 94% to 96%, which is still quite good for electrical equipment. For transformers operating under constant AC voltage and frequency, the efficiency can be as high as 98%. The efficiency of the transformer is η.