This paper presents a review of research and practice regarding water pollution compensation in China. The water quality in the Panjiakou-Daheiting water source areas and the rivers flowing into the reservoir is analyzed. Based on the evaluated sections and indicators, a model for quantitatively estimating the compensation for water pollution with consideration of the flux of pollutants is established. The model was used to estimate the amount of eco-compensation for water pollution in the rivers flowing into the Panjiakou-Daheiting Reservoir based on water quality and water quantity monitoring data from the year 2013.