In order to solve the low external quantum efficiency of the GaN-based LED caused by the total reflection, which occurs at the semiconductor-air interface, the Monte Carlo and wave theory are applied to simulate based on the basic structure of the GaN-based LED with double gratings, and the impact of the main loss of photon on the extraction efficiency is analyzed. Through the numerical simulation, different grating groove depth, period, and the absorption coefficient are applied to analyze the dynamic effects of the LED light extraction efficiency. The results show that light extraction change as similar periodic cosin with the increase of grating groove depth, which is in accordance with the relationship between grating diffraction efficiency and grating depth; the perfect grating period is similar to the wavelength in GaN or ITO. The light extraction efficiency of traditional slab LED decrease slower than grating structure LED with the increase of GaN material absorption coefficient. The depth and period both in transmitted and reflected gratings are 350 nm, 300 nm, and 230 nm, 250 nm, respectively. When the light absorption coefficient of GaN value is 0, the maximum light extraction efficiency of 67% can be obtained, while the light extraction efficiency of traditional slab LED is 18.5%. The light extraction efficiency of GaN-based LED can be improved more than 3 times after being applied with double gratings. Light extraction efficiency can be enhanced more effectively by improving crystal quality and decreasing light absorption coefficient.