Displacement-based seismic design methods have been used in port industry for decades. For determining demand displacements of pile-supported wharves, the substitute structure method, a nonlinear static demand analysis methodology, is used in current practice. In the method, the estimation of equivalent damping does not account for damping from soil–pile interaction. In view of this, a new damping equation for pile-supported wharf system as a whole based on the total energy dissipation of soil and structure is proposed. The energy dissipated by soil is quantified by the p–y curves of soil springs and Masing hysteretic rule, and energy dissipated by structure is the sum of energy dissipated by all plastic hinges appeared in piles. Then, the equivalent damping of wharf as a whole is derived by Jacobsen's approach for steady-state harmonic response. To figure out the contribution of soil–pile interaction on system damping as well as the accuracy and rationality of the equation, a case study is presented. It is found that the soil–pile interaction contributes significantly to the dissipated energy of wharf system, and the displacement demands of wharf based on the proposed equation are closer to those based on time-history analyses than other equations in current practice. •The equivalent damping equations utilized in practice of wharves are approximate.•A rational damping equation is proposed to consider soil–pile interaction.•Soil–pile interaction contributes significantly to the dissipated energy of wharf.•The proposed equation performs relatively well in determining displacement demands.