Electromechanical impedance (EMI) method is an effective and powerful technique in structural health monitoring (SHM) which couples the mechanical impedance of host structure with the electrical impedance measured at the piezoelectric wafer active sensor (PWAS) transducer terminals. Due to the electromechanical coupling in piezoelectric materials, changes in structural mechanical impedance are reflected in the electrical impedance measured at the PWAS. Therefore, the structural mechanical resonances are reflected in a virtually identical spectrum of peaks and valleys in the real part of the measured EMI. Multi-physics based finite element method (MP-FEM) has been widely used for the analysis of piezoelectric materials and structures. It uses finite elements taking both electrical and mechanical DOF's into consideration, which allows good differentiation of complicated structural geometries and damaged areas. In this paper, MP-FEM was then used to simulate PWAS EMI for the goal of SHM. EMI of free PWAS was first simulated and compared with experimental result. Then the constrained PWAS was studied. EMI of both metallic and glass fiber composite materials were simulated. The first case is the constrained PWAS on aluminum beam with various dimensions. The second case studies the sensitivity range of the EMI approach for damage detection on aluminum beam using a set of specimens with cracks at different locations. In the third case, structural damping effects were also studied in this paper. Our results have also shown that the imaginary part of the impedance and admittance can be used for sensor self-diagnosis.