A system and method for differential protection of a transformer under geomagnetically induced current (GIC). The method including: receiving differential currents associated with the transformer; outputting a high GIC signal where second harmonic phasors of the differential currents are in a negative-sequence format and at least one magnitude of the second harmonic phasors is greater than a magnitude threshold, or waveforms of three phases of the differential currents are all asymmetrical in a positive or negative direction; determining derivatives of the differential currents of three phases of the transformer; outputting a high supplementary signal where at least one of the derivatives of the differential currents is greater than a supplementary threshold; combining the GIC signal with the supplementary signal; combining the supplemented GIC signal with a second harmonic blocking signal; and outputting a trip signal for electrically tripping the transformer based on a supplemented second harmonic blocking signal.