A banknote jam determination system and method, the determination system comprising a sensor unit (101), a banknote information storage unit (102), a banknote jam threshold computing unit (103) and a banknote jam status determination unit (104). The banknote jam threshold computing unit (103) can compute a threshold (M) according to an actual space (S) between the actual length (L) of the banknote and the sensor. The banknote jam status determination unit (104) uses a threshold (M) computed in real time to determine whether a banknote jam occurs, and therefore the banknote jam determination system and method are a dynamic banknote jam determination technique based on a varied threshold (M) of a banknote and a sensor, and can improve measurement precision and ensure reliability.

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