Position sensors are widely used in different spheres: agriculture, household appliances, robotics, construction, environment, meteorology, security, tracking systems, energy industry, space industry, medicine, recreation and entertainment, transport and automobile production, and military industry. The research aims to analyse the characteristics of the sensor and to propose science-based solutions for the creation of the elements and the overall design of the position sensor, which is to be used as a constituent of a hydraulic servosystem. The paper describes different variants of sensor layout and parameters, according to which the basic inductive sensor design is selected. This paper presents mathematical formulas for developing algorithms to process position sensor data. These algorithms help to calculate the current location of the sensor by considering the dynamics of its motion. This paper also considers mathematical models used to perform calculations according to the given formulas. Algorithms for controlling the spool position of an electro-hydraulic power amplifier are synthesized and studied.