Misalignment and line width errors are main fabrication errors in Binary Optical Elements (BOE). It is important to analyze the influence of fabrication errors on binary optical element designers. We provided a layer by layer MATLAB analysis method based on scalar diffraction theory to study relationship between diffractive efficiency and lateral fabrication errors about 4 step and 8 step binary optical elements. Our main findings are that diffraction efficiency can be controlled by dominating misalignment errors for 8 step binary optical elements, and it also can be compensated by adjusting line width and alignment. This method is convenient and precise to analyze fabrication errors of binary optical elements.