Engine simulation based on one-dimensional gas dynamics is well suited for integration of all aspects arising in engine and powertrain developments. Commonly used turbocharger performance maps in engine simulation are measured in non-pulsating flow and without taking into account the heat transfer. Since on-engine turbochargers are exposed to pulsating flow and varying heat transfer situations, the maps in the engine simulation, i.e. GT-POWER, have to be shifted and corrected which are usually done by mass and efficiency multipliers for both turbine and compressor. The multipliers change the maps and are often different for every load point. Particularly, the efficiency multiplier is different for every heat transfer situation on the turbocharger. The aim of this paper is to include the heat transfer of the turbocharger in the engine simulation and consequently to reduce the use of efficiency multiplier for both the turbine and compressor. A set of experiment has been designed and performed on a water-oil-cooled turbocharger, which was installed on a 2 liter GDI engine with variable valve timing, for different load points of the engine and different conditions of heat transfer in the turbocharger. The experiments were the base to simulate heat transfer on the turbocharger, by adding a heat sink before the turbine and a heat source after the compressor. The efficiency multiplier of the turbine cannot compensate for all heat transfer in the turbine, so it is needed to put out heat from the turbine in addition to the using of efficiency multiplier. Results of this study show that including heat transfer of turbocharger in engine simulation enables to decrease the use of turbine efficiency multiplier and eliminate the use of compressor efficiency multiplier to correctly calculate the measured gas temperatures after turbine and compressor.