Modified stress method is a way to calculate stabilized layer settlement of the composite pile foundation. The main fault of this method is that it is too difficult to determine the pile-soil stress ratio—n. The statistics of the rigid pile stress in the composite pile foundation show that the ultimate capacity of rigid piles is used for over 90% in the edge and the corner of the foundation and over 80% in the middle. Accordingly the supposed capacity of rigid pile is close to its ultimate capacity. Thus the pile-soil stress ratio can be identified easily. So the new method is called ultimate stress method. In addition，the error caused by the hypothesis is studied. And it is compared with the error caused by the modified stress method. Conclusions are drawn as the following：the settlement calculated by the modified stress method without considering piles adjacent to the soil is bigger than reality；but it is smaller by the new assumption. So the settlement calculated by the ultimate stress method is closer to reality.